<SUBMISSION>
<ACCESSION-NUMBER>0000950129-07-004999
<TYPE>S-3/A
<PUBLIC-DOCUMENT-COUNT>5
<FILING-DATE>20071019
<DATE-OF-FILING-DATE-CHANGE>20071019
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>Energy Transfer Equity, L.P.
<CIK>0001276187
<ASSIGNED-SIC>4922
<IRS-NUMBER>300108820
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0831
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-3/A
<ACT>33
<FILE-NUMBER>333-146300
<FILM-NUMBER>071181306
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>2828 WOODSIDE STREET
<CITY>DALLAS
<STATE>TX
<ZIP>75204
<PHONE>2149810700
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>2828 WOODSIDE STREET
<CITY>DALLAS
<STATE>TX
<ZIP>75204
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>LAGRANGE ENERGY LP
<DATE-CHANGED>20040113
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>S-3/A
<SEQUENCE>1
<FILENAME>h48218a1sv3za.htm
<DESCRIPTION>AMENDMENT NO. 1 TO FORM S-3 - REGISTRATION NO. 333-146300
<TEXT>
<HTML>
<HEAD>
<TITLE>sv3za</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 91%; margin-left: 4%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B> As filed with the Securities and Exchange Commission on
    October&#160;19, 2007</B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="right" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B> Registration No.&#160;333-146300</B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>
    <CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER><!-- callerid=128 iwidth=504 length=0 --></B>
</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=504 length=0 -->

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">SECURITIES AND EXCHANGE
    COMMISSION</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">Washington,&#160;D.C.
    20549</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 16%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=504 length=84 -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">PRE-EFFECTIVE AMENDMENT
    NO.&#160;1</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt"> TO</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 18pt">
    <FONT style="white-space: nowrap">Form&#160;S-3</FONT></FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">REGISTRATION
    STATEMENT</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">UNDER</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">THE SECURITIES ACT OF
    1933</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 24pt">Energy Transfer Equity,
    L.P.</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 8pt">(Exact name of registrant as
    specified in its charter)</FONT></I>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="49%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<TR valign="bottom">
<TD nowrap align="center" valign="top">
    <B>Delaware</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    <B>30-0108820</B>
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
    <I><FONT style="font-size: 8pt">(State or other jurisdiction
    of<BR>
    incorporation or organization)</FONT></I>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <I><FONT style="font-size: 8pt">(I.R.S. Employer<BR>
    Identification No.)</FONT></I><FONT style="font-size: 8pt">
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Energy Transfer Equity, L.P.</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>3738 Oak Lawn Avenue</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Dallas, Texas 75219</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>(214)&#160;981-0700</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 8pt">(Address, including zip code,
    and telephone number, including area code, of registrant&#146;s
    principal executive offices)</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>John W. McReynolds</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>3738 Oak Lawn Avenue</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Dallas, Texas 75219</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>(214)&#160;981-0700</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 8pt">(Name, address, including zip
    code, and telephone number, including area code, of agent for
    service)</FONT></I>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 16%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=504 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Copy to:</I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Douglas McWilliams</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Vinson &#038; Elkins L.L.P.</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>First City Tower</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>1001 Fannin Street, Suite 2500</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Houston, Texas 77002-6760</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>(713) 758-2222</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Approximate date of commencement of proposed sale to the
    public:</B>&#160;&#160;From time to time after the effective
    date of this registration statement as determined by market
    conditions and other factors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the only securities being registered on this form are being
    offered pursuant to dividend or interest reinvestment plans,
    please check the following
    box.&#160;<FONT face="Wingdings">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If any of the securities being registered on this form are to be
    offered on a delayed or continuous basis pursuant to
    Rule&#160;415 under the Securities Act of 1933, other than
    securities offered only in connection with dividend or interest
    reinvestment plans, please check the following
    box.&#160;<FONT face="Wingdings">&#254;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this form is filed to register additional securities for an
    offering pursuant to Rule&#160;462(b) under the Securities Act,
    check the following box and list the Securities Act registration
    statement number of the earlier effective registration statement
    for the same offering.&#160;<FONT face="Wingdings">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this form is a post-effective amendment filed pursuant to
    Rule&#160;462(c) under the Securities Act, check the following
    box and list the Securities Act registration statement number of
    the earlier effective registration statement for the same
    offering.&#160;<FONT face="Wingdings">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this form is a registration statement pursuant to General
    Instruction I.D. or a post-effective amendment thereto that
    shall become effective upon filing with the Commission pursuant
    to Rule&#160;462(e) under the Securities Act, check the
    following box.&#160;<FONT face="Wingdings">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this form is a post-effective amendment to a registration
    statement filed pursuant to General Instruction I.D. filed to
    register additional securities or additional classes of
    securities pursuant to Rule&#160;413(b) under the Securities
    Act, check the following box.&#160;<FONT face="Wingdings">&#111;
    </FONT>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>The Registrant hereby amends this Registration Statement on
    such date or dates as may be necessary to delay its effective
    date until the Registrant shall file a further amendment which
    specifically states that this Registration Statement shall
    thereafter become effective in accordance with Section&#160;8(a)
    of the Securities Act of 1933 or until the Registration
    Statement shall become effective on such date as the Commission
    acting pursuant to said 8(a), may determine.</B>
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=504 length=0 -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER><!-- callerid=999 iwidth=504 length=0 -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">EXPLANATORY
    NOTE</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This registration statement consists of two prospectuses,
    covering the registration of:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    common units of Energy Transfer Equity, L.P.;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    common units of Energy Transfer Equity, L.P. that may be sold in
    one or more secondary offerings by the selling unitholders.
</TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE style="color: #FF0000" width="100%" border="1" cellpadding="5"><TR><TD style=text-align:justify>
<FONT style="font-size: 8pt; font-family: Arial, Helvetica; color: #E8112D">The
information in this prospectus is not complete and may be
changed. This prospectus is not an offer to sell nor does it
seek an offer to buy these securities in any jurisdiction where
the offer or sale is not permitted. We may not sell these
securities until the registration statement filed with the
Securities and Exchange Commission is effective.<BR>
</FONT>
</TD></TR></TABLE>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="color: #E8112D">SUBJECT TO COMPLETION, DATED
    OCTOBER&#160;19, 2007</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Preliminary
    Prospectus</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="h48218a1h4821803.gif" alt="(Energy Transfer Equity, L.P. LOGO)" ><B>
    </B>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 24pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Energy
    Transfer Equity, L.P.</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 18%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 14pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Common
    Units</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 18%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may from time to time offer common units representing limited
    partner interests in Energy Transfer Equity, L.P. under this
    prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common units are listed on the New York Stock Exchange under
    the symbol &#147;ETE.&#148;
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 18%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each time we sell securities we will provide a prospectus
    supplement that will contain specific information about the
    terms of that offering. The prospectus supplement may also add,
    update or change information contained in this prospectus. You
    should read this prospectus and any prospectus supplement
    carefully before you invest. You should also read the documents
    we have referred you to in the &#147;Where You Can Find More
    Information&#148; section of this prospectus for information on
    us and for our financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 12pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Investing in our securities involves risks. Limited
    partnerships are inherently different from corporations. You
    should carefully consider the risk factors beginning on
    page&#160;4 of this prospectus and in the applicable prospectus
    supplement before you make an investment in our securities</B>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or passed upon the adequacy or accuracy of this
    prospectus. Any representation to the contrary is a criminal
    offense.</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 18%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The date of this prospectus
    is&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2007.
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Table of
    Contents</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="97%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#101'>About This Prospectus</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#102'>Energy Transfer Equity, L.P.&#160;</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#103'>Energy Transfer Partners, L.P.&#160;</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#104'>Cautionary Statement Concerning Forward-Looking
    Statements</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#105'>Risk Factors</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    4
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#106'>Use of Proceeds</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    34
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#107'>Description of Our Common Units</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    35
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#108'>Our Cash Distribution Policy</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    39
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#109'>ETP&#146;s Cash Distribution Policy</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    42
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#110'>Material Provisions of Our Partnership
    Agreement</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    46
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#111'>Material Provisions of ETP&#146;s Partnership
    Agreement</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    57
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#112'>Material Tax Consequences</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    63
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#113'>Plan of Distribution</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    77
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#114'>Legal Matters</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    78
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#115'>Experts</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    78
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#116'>Where You Can Find More Information</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    78
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#117'>Incorporation of Certain Documents by
    Reference</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    79
</TD>
<TD>
</TD>
</TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h48218a1exv23w2.htm">Consent of Grant Thornton LLP.</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h48218a1exv23w3.htm">Consent of PricewaterhouseCoopers LLP.</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h48218a1exv23w4.htm">Consent of PricewaterhouseCoopers LLP.</A></FONT></TD></TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>In making your investment decision, you should rely only on
    the information contained or incorporated by reference in this
    prospectus. We have not authorized anyone to provide you with
    any other information. If anyone provides you with different or
    inconsistent information, you should not rely on it</B>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>You should not assume that the information contained in this
    prospectus is accurate as of any date other than the date on the
    front cover of this prospectus. You should not assume that the
    information contained in the documents incorporated by reference
    in this prospectus is accurate as of any date other than the
    respective dates of those documents. Our business, financial
    condition, results of operations and prospects may have changed
    since those dates.</B>
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "ABOUT THIS PROSPECTUS" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='101'></A><B><FONT style="font-family: 'Times New Roman', Times">ABOUT
    THIS PROSPECTUS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus is part of a registration statement on
    <FONT style="white-space: nowrap">Form&#160;S-3</FONT>
    that we filed with the Securities and Exchange Commission, or
    SEC, using a &#147;shelf&#148; registration process. Under this
    shelf process, we may offer from time to time up to
    $2,000,000,000 of our securities. Each time we offer securities,
    we will provide you with a prospectus supplement that will
    describe, among other things, the specific amounts and prices of
    the securities being offered and the terms of the offering. The
    prospectus supplement may also add, update or change information
    contained in this prospectus. Therefore, before you invest in
    our securities, you should read this prospectus and any attached
    prospectus supplement relating to the securities offered to you
    together with the additional information described under the
    heading &#147;Where You Can Find More Information.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All references in this prospectus to &#147;we,&#148;
    &#147;us,&#148; &#147;Energy Transfer Equity&#148; and
    &#147;our&#148; refer to Energy Transfer Equity, L.P. and its
    subsidiaries, Energy Transfer Partners, L.L.C. and Energy
    Transfer Partners GP, L.P. All references in this prospectus to
    &#147;our general partner&#148; refer to LE GP, LLC. All
    references in this prospectus to &#147;Energy Transfer Partners
    GP&#148; or &#147;ETP GP&#148; refer to Energy Transfer Partners
    GP, L.P. All references in this prospectus to &#147;Energy
    Transfer Partners&#148; or &#147;ETP&#148; refer to Energy
    Transfer Partners, L.P. and its wholly owned subsidiaries and
    predecessors.
</DIV>


<!-- link1 "ENERGY TRANSFER EQUITY, L.P." -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='102'></A><B><FONT style="font-family: 'Times New Roman', Times">ENERGY
    TRANSFER EQUITY, L.P.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are a publicly traded limited partnership. Our common units
    are publicly traded on the New York Stock Exchange
    (&#147;NYSE&#148;) under the ticker symbol &#147;ETE.&#148; We
    were formed in September 2002 and completed our initial public
    offering of 24,150,000 common units in February 2006. Our only
    cash generating assets are our direct and indirect investments
    in limited partner and general partner interests in our
    subsidiary, Energy Transfer Partners, L.P. Our direct and
    indirect ownership of ETP consists of approximately
    62.5&#160;million common units, the 2% general partner interests
    (through Energy Transfer Partners GP, L.P., ETP&#146;s general
    partner and one of our subsidiaries) and 100% of the incentive
    distribution rights.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our principal executive offices are located at 3738 Oak Lawn
    Avenue, Dallas, Texas 75219, and our telephone number at that
    location is
    <FONT style="white-space: nowrap">(214)&#160;981-0700.</FONT>
</DIV>


<!-- link1 "ENERGY TRANSFER PARTNERS, L.P." -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='103'></A><B><FONT style="font-family: 'Times New Roman', Times">ENERGY
    TRANSFER PARTNERS, L.P.</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP is a publicly traded partnership owning and operating a
    diversified portfolio of energy assets. ETP&#146;s natural gas
    operations include intrastate natural gas gathering and
    transportation pipelines, interstate transportation pipelines,
    natural gas treating and processing assets located in Texas, New
    Mexico, Arizona, Oklahoma, Louisiana, Utah and Colorado and
    three natural gas storage facilities located in Texas. These
    assets include approximately 14,000&#160;miles of intrastate
    pipeline in service, with an additional 500&#160;miles of
    intrastate pipeline under construction, and 2,400&#160;miles of
    interstate pipelines. ETP is also one of the three largest
    retail marketers of propane in the United States, serving more
    than one million customers across the country.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>


<!-- link1 "CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='104'></A><B><FONT style="font-family: 'Times New Roman', Times">CAUTIONARY
    STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus contains various forward-looking statements and
    information that are based on our beliefs and those of our
    general partner, as well as assumptions made by and information
    currently available to us. These forward-looking statements are
    identified as any statement that does not relate strictly to
    historical or current facts. When used in this prospectus, words
    such as &#147;anticipate,&#148; &#147;project,&#148;
    &#147;expect,&#148; &#147;plan,&#148; &#147;goal,&#148;
    &#147;forecast,&#148; &#147;intend,&#148; &#147;could,&#148;
    &#147;believe,&#148; &#147;may,&#148; and similar expressions
    and statements regarding our plans and objectives for future
    operations, are intended to identify forward-looking statements.
    Although we and our general partner believe that the
    expectations on which such forward-looking statements are based
    are reasonable, neither we nor our general partner can give
    assurances that such expectations will prove to be correct.
    Forward-looking statements are subject to a variety of risks,
    uncertainties and assumptions. If one or more of these risks or
    uncertainties materialize, or if underlying assumptions prove
    incorrect, our actual results
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    1
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    may vary materially from those anticipated, estimated, projected
    or expected. Among the key risk factors that may have a direct
    bearing on our results of operations and financial condition are:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount of natural gas transported on ETP&#146;s pipelines
    and gathering systems;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of throughput in ETP&#146;s natural gas processing and
    treating facilities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the fees ETP charges and the margins it realizes for its
    gathering, treating, processing, storage and transportation
    services;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the prices and market demand for, and the relationship between,
    natural gas and natural gas liquids, or NGLs;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    energy prices generally;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the prices of natural gas and propane compared to the price of
    alternative and competing fuels;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the general level of petroleum product demand and the
    availability and price of propane supplies;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of domestic oil, propane and natural gas production;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the availability of imported oil and natural gas;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability to obtain adequate supplies of propane for retail
    sale in the event of an interruption in supply or transportation
    and the availability of capacity to transport propane to market
    areas;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    actions taken by foreign oil and gas producing nations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the political and economic stability of petroleum producing
    nations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the effect of weather conditions on demand for oil, natural gas
    and propane;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    availability of local, intrastate and interstate transportation
    systems;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the continued ability to find and contract for new sources of
    natural gas supply;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    availability and marketing of competitive fuels;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the impact of energy conservation efforts;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    energy efficiencies and technological trends;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    governmental regulation and taxation;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    changes to, and the application of, regulation of tariff rates
    and operational requirements related to our interstate and
    intrastate pipelines;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    hazards or operating risks incidental to the gathering,
    treating, processing and transporting of natural gas and NGLs or
    to the transporting, storing and distributing of propane that
    may not be fully covered by insurance;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the maturity of the propane industry and competition from other
    propane distributors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    competition from other midstream companies, interstate pipeline
    companies and propane distribution companies;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    loss of key personnel;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    loss of key natural gas producers or the providers of
    fractionation services;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reductions in the capacity or allocations of third party
    pipelines that connect with ETP&#146;s pipelines and facilities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the effectiveness of risk-management policies and procedures and
    the ability of ETP&#146;s liquids marketing counterparties to
    satisfy their financial commitments;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the nonpayment or nonperformance by ETP&#146;s customers;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    2
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    regulatory, environmental, political and legal uncertainties
    that may affect the timing and cost of our internal growth
    projects, such as our construction of additional pipeline
    systems;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    risks associated with the construction of new pipelines and
    treating and processing facilities or additions to ETP&#146;s
    existing pipelines and facilities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the availability and cost of capital and ETP&#146;s ability to
    access certain capital sources;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability to successfully identify and consummate strategic
    acquisitions at purchase prices that are accretive to ETP&#146;s
    financial results and to successfully integrate acquired
    businesses;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    changes in laws and regulations to which we are subject,
    including tax, environmental, transportation and employment
    regulations or new interpretations by regulatory agencies
    concerning such laws and regulations;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the costs and effects of legal and administrative proceedings.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should not put undue reliance on any forward-looking
    statements. When considering forward-looking statements, please
    review the risk factors described under &#147;Risk Factors&#148;
    in this prospectus.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    3
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "RISK FACTORS" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='105'></A><B><FONT style="font-family: 'Times New Roman', Times">RISK
    FACTORS</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>An investment in our securities involves a high degree of
    risk. You should carefully consider the following risk factors,
    together with all of the other information included in, or
    incorporated by reference into, this report in evaluating an
    investment in our securities. If any of these risks were to
    occur, our business, financial condition or results of
    operations could be adversely affected. In that case, the
    trading price of our common units could decline and you could
    lose all or part of your investment.</I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Inherent in an Investment in Us</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    only assets are our partnership interests, including the
    incentive distribution rights, in ETP and, therefore, our cash
    flow is dependent upon the ability of ETP to make distributions
    in respect of those partnership interests.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The amount of cash that ETP can distribute to its partners,
    including us, each quarter depends upon the amount of cash it
    generates from its operations, which will fluctuate from quarter
    to quarter and will depend on, among other things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount of natural gas transported in ETP&#146;s pipelines
    and gathering systems;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of throughput in its processing and treating
    operations;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the fees it charges and the margins it realizes for its
    gathering, treating, processing, storage and transportation
    services;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the price of natural gas;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the relationship between natural gas and NGL prices;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the weather in its operating areas;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the cost of the propane it buys for resale and the prices it
    receives for its propane;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of competition from other midstream companies,
    interstate pipeline companies, propane companies and other
    energy providers;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of its operating costs;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    prevailing economic conditions;&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of ETP&#146;s hedging activities.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the actual amount of cash that ETP will have
    available for distribution will also depend on other factors,
    such as:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of capital expenditures it makes;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of non-operating costs related to litigation and
    regulatory compliance matters;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the cost of acquisitions, if any;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the levels of any margin calls that result from changes in
    commodity prices;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    its debt service requirements;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fluctuations in its working capital needs;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    its ability to make working capital borrowings under its credit
    facilities to make distributions;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    its ability to access capital markets;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    restrictions on distributions contained in its debt
    agreements;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount, if any, of cash reserves established by its general
    partner in its discretion for the proper conduct of ETP&#146;s
    business.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because of these factors, we cannot guarantee that ETP will have
    sufficient available cash to pay a specific level of cash
    distributions to its partners.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, you should be aware that the amount of cash that
    ETP has available for distribution depends primarily upon its
    cash flow, including cash flow from financial reserves and
    working capital borrowings, and
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    is not solely a function of profitability, which will be
    affected by non-cash items. As a result, ETP may make cash
    distributions during periods when it records net losses and may
    not make cash distributions during periods when it records net
    income. Please read &#147;&#151; Risks Related to Energy
    Transfer Partners&#146; Business&#148; for a discussion of
    further risks affecting ETP&#146;s ability to generate
    distributable cash flow.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    not have sufficient cash to pay distributions at our current
    quarterly distribution level or to increase
    distributions.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The source of our earnings and cash flow is cash distributions
    from ETP. Therefore, the amount of distributions we are
    currently able to make to our unitholders may fluctuate based on
    the level of distributions ETP makes to its partners. ETP may
    not be able to continue to make quarterly distributions at its
    current level or increase its quarterly distributions in the
    future. In addition, while we would expect to increase or
    decrease distributions to our unitholders if ETP increases or
    decreases distributions to us, the timing and amount of such
    increased or decreased distributions, if any, will not
    necessarily be comparable to the timing and amount of the
    increase or decrease in distributions made by ETP to us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our ability to distribute cash received from ETP to our
    unitholders is limited by a number of factors, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    interest expense and principal payments on our indebtedness;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    restrictions on distributions contained in any current or future
    debt agreements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our general and administrative expenses;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    expenses of our subsidiaries other than ETP, including tax
    liabilities of our corporate subsidiaries, if any;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    capital contributions to maintain our 2% general partner
    interest in ETP as required by the partnership agreement of ETP
    upon the issuance of additional partnership securities by
    ETP;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reserves our general partner believes prudent for us to maintain
    for the proper conduct of our business or to provide for future
    distributions.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We cannot guarantee that in the future we will be able to pay
    distributions or that any distributions we do make will be at or
    above our current quarterly distribution. The actual amount of
    cash that is available for distribution to our unitholders will
    depend on numerous factors, many of which are beyond our control
    or the control of our general partner.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    general partner is not elected by the unitholders and cannot be
    removed without its consent.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unlike the holders of common stock in a corporation, our
    unitholders have only limited voting rights on matters affecting
    our business and, therefore, limited ability to influence
    management&#146;s decisions regarding our business. Our
    unitholders do not have the ability to elect our general partner
    or the officers or directors of our general partner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, if our unitholders are dissatisfied with the
    performance of our general partner, they have little ability to
    remove our general partner. Our general partner may not be
    removed except upon the vote of the holders of at least
    66<FONT style="vertical-align: top; font-size: 70&#37;">2</FONT>/<FONT style="font-size: 70&#37;">3</FONT>%
    of our outstanding units. Because affiliates of our general
    partner (including Enterprise GP Holdings L.P.) own
    approximately 122.6&#160;million common units, representing
    54.8% of our outstanding common units, it will be particularly
    difficult for our general partner to be removed without the
    consent of such affiliates. As a result, the price at which our
    common units will trade may be lower because of the absence or
    reduction of a takeover premium in the trading price.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">A
    reduction in ETP&#146;s distributions will disproportionately
    affect the amount of cash distributions to which we are
    entitled.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our direct and indirect ownership of 100% of the incentive
    distribution rights in ETP (50% prior to November&#160;1, 2006),
    through our ownership of equity interests in Energy Transfer
    Partners GP, the holder of
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    5
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the incentive distribution rights, entitles us to receive our
    pro rata share of specified percentages of total cash
    distributions made by ETP as it reaches established target cash
    distribution levels. The amount of the cash distributions that
    we received from ETP during our fiscal year 2006 related to our
    ownership interest in the incentive distribution rights
    increased at a more rapid rate than the amount of the cash
    distributions related to our 2% general partner interest in ETP
    and our ETP common units. We currently receive our pro rata
    share of cash distributions from ETP based on the highest
    incremental percentage, 48%, to which Energy Transfer Partners
    GP is entitled pursuant to its incentive distribution rights in
    ETP. A decrease in the amount of distributions by ETP to less
    than $0.4125 per common unit per quarter would reduce Energy
    Transfer Partners GP&#146;s percentage of the incremental cash
    distributions above $0.3175 per common unit per quarter from 48%
    to 23%. As a result, any such reduction in quarterly cash
    distributions from ETP would have the effect of
    disproportionately reducing the amount of all distributions that
    we receive from ETP based on our ownership interest in the
    incentive distribution rights in ETP as compared to cash
    distributions we receive from ETP on our 2% general partner
    interest in ETP and our ETP common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Neither
    we nor ETP will be prohibited from competing with each
    other.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Neither our partnership agreement nor the partnership agreement
    of ETP prohibits us from owning assets or engaging in businesses
    that compete directly or indirectly with ETP or prohibit ETP
    from owning assets or engaging in businesses that compete
    directly or indirectly with us, except that ETP&#146;s
    partnership agreement prohibits us from engaging in the retail
    propane business in the United States. In addition, we may
    acquire, construct or dispose of any assets in the future
    without any obligation to offer ETP the opportunity to purchase
    or construct any of those assets, and ETP may acquire, construct
    or dispose of any assets in the future without any obligation to
    offer us the opportunity to purchase or construct any of those
    assets.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    increased consolidated debt level and our debt agreements and
    those of our subsidiaries may limit our ability to make
    distributions to unitholders and may limit the distributions we
    receive from ETP and our future financial and operating
    flexibility.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of May&#160;31, 2007, we had approximately $5.0&#160;billion
    of consolidated debt outstanding. Our level of indebtedness
    affects our operations in several ways, including, among other
    things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a significant portion of our and ETP&#146;s cash flow from
    operations will be dedicated to the payment of principal and
    interest on outstanding debt and will not be available for other
    purposes, including payment of distributions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    covenants contained in our and ETP&#146;s existing debt
    arrangements require us to meet financial tests that may
    adversely affect our flexibility in planning for and reacting to
    changes in our and ETP&#146;s business;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to obtain additional financing for working capital,
    capital expenditures, acquisitions and general partnership
    purposes may be limited;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we may be at a competitive disadvantage relative to similar
    companies that have less debt;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we may be more vulnerable to adverse economic and industry
    conditions as a result of our significant debt level;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    failure to comply with the various restrictive and affirmative
    covenants of the credit agreements could negatively impact our
    ability and the ability of our subsidiaries to incur additional
    debt and to pay distributions. We are required to measure these
    financial tests and covenants quarterly and, as of May&#160;31,
    2007, we were in compliance with all financial requirements,
    tests, limitations, and covenants related to financial ratios
    under our existing credit agreements.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Increases
    in interest rates could materially adversely affect our
    business, results of operations, cash flows and financial
    condition.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to our exposure to commodity prices, we have
    significant exposure to increases in interest rates. As of
    May&#160;31, 2007, we had approximately $5.0&#160;billion of
    consolidated debt, of which approximately
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    6
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    $4.1&#160;billion was at fixed interest rates and approximately
    $0.9&#160;billion was at variable interest rates, after giving
    effect to our existing interest swap arrangements. We may enter
    into additional interest rate swap arrangements. As a result,
    our results of operations, cash flows and financial condition
    could be materially adversely affected by significant increases
    in interest rates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An increase in interest rates may also cause a corresponding
    decline in demand for equity investments, in general, and in
    particular for yield-based equity investments such as our common
    units. Any such reduction in demand for our common units
    resulting from other more attractive investment opportunities
    may cause the trading price of our common units to decline.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    credit and risk profile of our general partner and its owners
    could adversely affect our credit ratings and
    profile.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The credit and business risk profiles of our general partner or
    owners of our general partner may be factors in credit
    evaluations of us as a master limited partnership. This is
    because our general partner can exercise significant influence
    over our business activities, including our cash distributions
    and, acquisition strategy and business risk profile. Another
    factor that may be considered is the financial condition of our
    general partner and its owners, including the degree of their
    financial leverage and their dependence on cash flow from us to
    service their indebtedness.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    issue an unlimited number of limited partner interests without
    the consent of our unitholders, which will dilute your ownership
    interest in us and may increase the risk that we will not have
    sufficient available cash to maintain or increase our per unit
    distribution level.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement allows us to issue an unlimited number
    of additional limited partner interests, including securities
    senior to the common units, without the approval of our
    unitholders. The issuance of additional common units or other
    equity securities by us will have the following effects:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our unitholders&#146; current proportionate ownership interest
    in us will decrease;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount of cash available for distribution on each common
    unit or partnership security may decrease;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ratio of taxable income to distributions may increase;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the relative voting strength of each previously outstanding
    common unit may be diminished;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the market price of our common units may decline.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, ETP may sell an unlimited number of limited partner
    interests without the consent of its unitholders which will
    dilute existing interests of its unitholders, including us. The
    issuance of additional common units or other equity securities
    by ETP will have essentially the same effects as detailed above.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    market price of our common units could be adversely affected by
    sales of substantial amounts of our units in the public markets,
    including sales by our existing unitholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Sales by any of our existing unitholders of a substantial number
    of our units in the public markets, or the perception that such
    sales might occur, could have a material adverse effect on the
    price of our units or could impair our ability to obtain capital
    through an offering of equity securities. We do not know whether
    any such sales would be made in the public market or in private
    placements, nor do we know what impact such potential or actual
    sales would have on our unit price in the future.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Control
    of our general partner may be transferred to a third party
    without unitholder consent.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner may transfer its general partner interest in
    us to a third party in a merger or in a sale of its equity
    securities without the consent of our unitholders. Furthermore,
    there is no restriction in the partnership agreement on the
    ability of the members of our general partner to sell or
    transfer all or part of their ownership interest in our general
    partner to a third party. The new owner or owners of our general
    partner
</DIV>

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    <BR>
    7
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    would then be in a position to replace the directors and
    officers of our general partner and control the decisions made
    and actions taken by the board of directors and officers.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    general partner has only one executive officer, and we are
    dependent on third parties, including key personnel of ETP under
    a shared services agreement, to provide the financial,
    accounting, administrative and legal services necessary to
    operate our business.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    John W. McReynolds, the President and Chief Financial Officer of
    our general partner, is the only executive officer charged with
    managing our business other than through our shared services
    agreement with ETP. We do not currently have a plan for
    identifying a successor to Mr.&#160;McReynolds in the event that
    he retires, dies or becomes disabled. If Mr.&#160;McReynolds
    ceases to serve as the President and Chief Financial Officer of
    our general partner for any reason, we would be without
    executive management other than through our shared services
    agreement with ETP until one or more new executive officers are
    selected by the board of directors of our general partner. As a
    consequence, the loss of Mr.&#160;McReynolds&#146; services
    could have a material negative impact on the management of our
    business.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Moreover, we rely on the services of key personnel of ETP,
    including the ongoing involvement and continued leadership of
    Kelcy L. Warren, one of the founders of ETP&#146;s midstream
    business, as well as other key members of ETP&#146;s management
    team such as Mackie McCrea, President of Midstream Operations
    and R.C. Mills, President of Propane Operations. Mr.&#160;Warren
    has been integral to the success of ETP&#146;s midstream and
    transportation and storage businesses because of his ability to
    identify and develop strategic business opportunities. Losing
    his leadership could make it more difficult for ETP to identify
    internal growth projects and accretive acquisitions, which could
    have a material adverse effect on ETP&#146;s ability to increase
    the cash distributions paid on its partnership interests.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s executive officers that provide services to us
    pursuant to a shared services agreement allocate their time
    between us and ETP. To the extent that these officers face
    conflicts regarding the allocation of their time, we may not
    receive the level of attention from them that the management of
    our business requires. If ETP is unable to provide us with a
    sufficient number of personnel with the appropriate level of
    technical accounting and financial expertise, our internal
    accounting controls could be adversely impacted.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">An
    increase in interest rates may cause the market price of our
    units to decline.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Like all equity investments, an investment in our units is
    subject to certain risks. In exchange for accepting these risks,
    investors may expect to receive a higher rate of return than
    would otherwise be obtainable from lower-risk investments.
    Accordingly, as interest rates rise, the ability of investors to
    obtain higher risk-adjusted rates of return by purchasing
    government-backed debt securities may cause a corresponding
    decline in demand for riskier investments generally, including
    yield-based equity investments such as publicly traded limited
    partnership interests. Reduced demand for our units resulting
    from investors seeking other more favorable investment
    opportunities may cause the trading price of our units to
    decline.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Your
    liability as a limited partner may not be limited, and our
    unitholders may have to repay distributions or make additional
    contributions to us under limited circumstances.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a limited partner in a partnership organized under Delaware
    law, you could be held liable for our obligations to the same
    extent as a general partner if you participate in the
    &#147;control&#148; of our business. Our general partner
    generally has unlimited liability for the obligations of the
    partnership, except for those contractual obligations of the
    partnership that are expressly made without recourse to our
    general partner. Additionally, the limitations on the liability
    of holders of limited partner interests for the obligations of a
    limited partnership have not been clearly established in many
    jurisdictions in which we do business. In some of the
    jurisdictions in which we do business, the applicable statutes
    do not define control, but do permit limited partners to engage
    in certain activities, including, among other actions, taking
    any action with respect to the dissolution of the partnership,
    the sale, exchange, lease or mortgage of any asset of the
    partnership, the
</DIV>

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    <BR>
    8
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    admission or removal of the general partner and the amendment of
    the partnership agreement. You could, however, be liable for any
    and all of our obligations as if you were a general partner if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a court or government agency determined that we were conducting
    business in a state but had not complied with that particular
    state&#146;s partnership statute; or
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    your right to act with other unitholders to take other actions
    under our partnership agreement is found to constitute
    &#147;control&#148; of our business.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under limited circumstances, our unitholders may have to repay
    amounts wrongfully distributed to them. Under
    <FONT style="white-space: nowrap">Section&#160;17-607</FONT>
    of the Delaware Revised Uniform Limited Partnership Act, neither
    Energy Transfer Equity nor ETP may make a distribution to its
    unitholders if the distribution would cause Energy Transfer
    Equity&#146;s or ETP&#146;s respective liabilities to exceed the
    fair value of their respective assets. Delaware law provides
    that for a period of three years from the date of the
    impermissible distribution, partners who received the
    distribution and knew at the time of the distribution that it
    violated Delaware law will be liable to the partnership for the
    distribution amount. Liabilities to partners on account of their
    partnership interest and liabilities that are non-recourse to
    the partnership are not counted for purposes of determining
    whether a distribution is permitted.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If in
    the future we cease to manage and control ETP, we may be deemed
    to be an investment company under the Investment Company Act of
    1940.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we cease to manage and control ETP and are deemed to be an
    investment company under the Investment Company Act of 1940, we
    would either have to register as an investment company under the
    Investment Company Act, obtain exemptive relief from the SEC or
    modify our organizational structure or our contract rights to
    fall outside the definition of an investment company.
    Registering as an investment company could, among other things,
    materially limit our ability to engage in transactions with
    affiliates, including the purchase and sale of certain
    securities or other property to or from our affiliates, restrict
    our ability to borrow funds or engage in other transactions
    involving leverage and require us to add additional directors
    who are independent of us or our affiliates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If
    Energy Transfer Partners GP withdraws or is removed as
    ETP&#146;s general partner, then we would lose control over the
    management and affairs of Energy Transfer Partners, the risk
    that we would be deemed an investment company under the
    Investment Company Act of 1940 would be exacerbated and our
    indirect ownership of the general partner interests and 100% of
    the incentive distribution rights in ETP could be cashed out or
    converted into ETP common units at an unattractive
    valuation.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the terms of ETP&#146;s partnership agreement, ETP GP will
    be deemed to have withdrawn as general partner if, among other
    things, it:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    voluntarily withdraws from the partnership by giving notice to
    the other partners;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    transfers all, but not less than all, of its partnership
    interests to another entity in accordance with the terms of
    ETP&#146;s partnership agreement;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    makes a general assignment for the benefit of creditors, files a
    voluntary bankruptcy petition, seeks to liquidate, acquiesces in
    the appointment of a trustee, receiver or liquidator, or becomes
    subject to an involuntary bankruptcy petition;&#160;or
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    dissolves itself under Delaware law without reinstatement within
    the requisite period.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, ETP GP can be removed as ETP&#146;s general partner
    if that removal is approved by unitholders holding at least
    66<FONT style="vertical-align: top; font-size: 70&#37;">2</FONT>/<FONT style="font-size: 70&#37;">3</FONT>%
    of ETP&#146;s outstanding units (including units held by ETP GP
    and its affiliates).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If ETP GP withdraws from being ETP&#146;s general partner in
    compliance with ETP&#146;s partnership agreement or is removed
    from being ETP&#146;s general partner under circumstances not
    involving a final adjudication of actual fraud, gross negligence
    or willful and wanton misconduct, it may require the successor
    general partner to purchase its general partner interests,
    incentive distribution rights and limited partner interests in
    ETP for fair market value. If ETP GP withdraws from being
    ETP&#146;s general partner in violation of ETP&#146;s
    partnership agreement or is removed from being ETP&#146;s
    general partner in circumstances where a court enters a judgment
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    9
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    that cannot be appealed finding it liable for actual fraud,
    gross negligence or willful or wanton misconduct in its capacity
    as ETP&#146;s general partner, and the successor general partner
    does not exercise its option to purchase the general partner
    interests, incentive distribution rights and limited partner
    interests held by ETP GP in ETP for fair market value, then the
    general partner interests and incentive distribution rights held
    by ETP GP in ETP could be converted into limited partner
    interests pursuant to a valuation performed by an investment
    banking firm or other independent expert. Under any of the
    foregoing scenarios, ETP GP would lose control over the
    management and affairs of ETP, thereby increasing the risk that
    we would be deemed an investment company subject to regulation
    under the Investment Company Act of 1940. In addition, our
    indirect ownership of the general partner interests and 100% of
    the incentive distribution rights in ETP, to which a significant
    portion of the value of our common units is currently
    attributable, could be cashed out or converted into ETP common
    units at an unattractive valuation.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    partnership agreement restricts the rights of unitholders owning
    20% or more of our units.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our unitholders&#146; voting rights are restricted by the
    provision in our partnership agreement generally providing that
    any units held by a person that owns 20% or more of any class of
    units then outstanding, other than our general partner and its
    affiliates, cannot be voted on any matter. In addition, our
    partnership agreement contains provisions limiting the ability
    of our unitholders to call meetings or to acquire information
    about our operations, as well as other provisions limiting our
    unitholders&#146; ability to influence the manner or direction
    of our management. As a result, the price at which our common
    units will trade may be lower because of the absence or
    reduction of a takeover premium in the trading price.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Future
    sales of the ETP common units we own or other limited partner
    interests in the public market could reduce the market price of
    our unitholders&#146; limited partner interests.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of May&#160;31, 2007, we owned approximately
    62.5&#160;million common units of ETP. If we were to sell
    <FONT style="white-space: nowrap">and/or</FONT>
    distribute any ETP common units to the holders of our equity
    interests in the future, those holders may dispose of some or
    all of these units. The sale or disposition of a substantial
    portion of these units in the public markets could reduce the
    market price of ETP&#146;s outstanding common units and our
    receipt of distributions.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Cost
    reimbursements due to our general partner may be substantial and
    may reduce our ability to pay the distributions to our
    unitholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to making any distributions to our unitholders, we will
    reimburse our general partner for all expenses it has incurred
    on our behalf. In addition, our general partner and its
    affiliates may provide us with services for which we will be
    charged reasonable fees as determined by our general partner.
    The reimbursement of these expenses and the payment of these
    fees could adversely affect our ability to make distributions to
    our unitholders. Our general partner has sole discretion to
    determine the amount of these expenses and fees.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, under Delaware partnership law, our general partner
    has unlimited liability for our obligations, such as our debts
    and environmental liabilities, except for our contractual
    obligations that are expressly made without recourse to our
    general partner. To the extent our general partner incurs
    obligations on our behalf, we are obligated to reimburse or
    indemnify it. If we are unable or unwilling to reimburse or
    indemnify our general partner, our general partner may take
    actions to cause us to make payments of these obligations and
    liabilities. Any such payments could reduce the amount of cash
    available for distribution to our unitholders and cause the
    value of our common units to decline.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">An
    impairment of goodwill and intangible assets could reduce our
    earnings.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At May&#160;31, 2007, our consolidated balance sheet reflected
    $746&#160;million of goodwill and $432&#160;million of
    intangible assets. Goodwill is recorded when the purchase price
    of a business exceeds the fair market value of the tangible and
    separately measurable intangible net assets. Accounting
    principles generally accepted in the United States require us to
    test goodwill for impairment on an annual basis or when events
    or circumstances occur indicating that goodwill might be
    impaired. Long-lived assets such as intangible assets with
    finite useful lives are reviewed for impairment whenever events
    or changes in circumstances indicate that the carrying amount
    may not be recoverable. If we determine that any of our goodwill
    or intangible assets were impaired,
</DIV>

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    <BR>
    10
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    we would be required to take an immediate charge to earnings
    with a correlative effect on partners&#146; equity and balance
    sheet leverage as measured by debt to total capitalization.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to Conflicts of Interest</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Although
    we control ETP through our ownership of its general partner,
    ETP&#146;s general partner owes fiduciary duties to ETP and
    ETP&#146;s unitholders, which may conflict with our
    interests.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Conflicts of interest exist and may arise in the future as a
    result of the relationships between us and our affiliates,
    including ETP&#146;s general partner, on the one hand, and ETP
    and its limited partners, on the other hand. The directors and
    officers of ETP&#146;s general partner have fiduciary duties to
    manage ETP in a manner beneficial to us, its owner. At the same
    time, the general partner has a fiduciary duty to manage ETP in
    a manner beneficial to ETP and its limited partners. The board
    of directors of ETP&#146;s general partner will resolve any such
    conflict and has broad latitude to consider the interests of all
    parties to the conflict. The resolution of these conflicts may
    not always be in our best interest or that of our unitholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For example, conflicts of interest may arise in the following
    situations:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the allocation of shared overhead expenses to ETP and us;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the interpretation and enforcement of contractual obligations
    between us and our affiliates, on the one hand, and ETP, on the
    other hand;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the determination of the amount of cash to be distributed to
    ETP&#146;s partners and the amount of cash to be reserved for
    the future conduct of ETP&#146;s business;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the determination of whether to make borrowings under ETP&#146;s
    revolving working capital facility to pay distributions to
    ETP&#146;s partners;&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any decision we make in the future to engage in business
    activities independent of ETP.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    fiduciary duties of our general partner&#146;s officers and
    directors may conflict with those of ETP&#146;s general
    partner.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Conflicts of interest may arise because of the relationships
    between ETP&#146;s general partner, ETP and us. Our general
    partner&#146;s directors and officers have fiduciary duties to
    manage our business in a manner beneficial to us and our
    unitholders. Some of our general partner&#146;s directors are
    also directors and officers of ETP&#146;s general partner, and
    have fiduciary duties to manage the business of ETP in a manner
    beneficial to ETP and ETP&#146;s unitholders. The resolution of
    these conflicts may not always be in our best interest or that
    of our unitholders.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    risk of competition with affiliates of our general partner has
    increased.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement provides that our general partner will
    be restricted from engaging in any business activities other
    than acting as our general partner and those activities
    incidental to its ownership of interests in us. Except as
    provided in our Partnership Agreement, affiliates of our general
    partner are not prohibited from engaging in other businesses or
    activities, including those that might be in direct competition
    with us. On May&#160;7, 2007, Enterprise GP Holdings L.P.
    acquired a 34.9% non-controlling equity interest in our general
    partner. Enterprise GP Holdings L.P. and its subsidiaries are a
    North American midstream energy business. As a result, there is
    greater risk that competition with affiliates of our general
    partner could occur, which could adversely impact our results of
    operations and cash available for distribution.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Potential
    conflicts of interest may arise among our general partner, its
    affiliates and us. Our general partner and its affiliates have
    limited fiduciary duties to us and our unitholders, which may
    permit them to favor their own interests to the detriment of us
    and our unitholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Conflicts of interest may arise among our general partner and
    its affiliates, on the one hand, and us and our unitholders, on
    the other hand. As a result of these conflicts, our general
    partner may favor its own
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    11
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    interests and the interests of its affiliates over the interests
    of our unitholders. These conflicts include, among others, the
    following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our general partner is allowed to take into account the
    interests of parties other than us, including ETP and its
    affiliates and any general partners and limited partnerships
    acquired in the future, in resolving conflicts of interest,
    which has the effect of limiting its fiduciary duties to our
    unitholders.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our general partner has limited its liability and reduced its
    fiduciary duties under the terms of our partnership agreement,
    while also restricting the remedies available to our unitholders
    for actions that, without these limitations, might constitute
    breaches of fiduciary duty. As a result of purchasing our units,
    unitholders consent to various actions and conflicts of interest
    that might otherwise constitute a breach of fiduciary or other
    duties under applicable state law.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our general partner determines the amount and timing of our
    investment transactions, borrowings, issuances of additional
    partnership securities and reserves, each of which can affect
    the amount of cash that is available for distribution to our
    unitholders.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our general partner determines which costs it and its affiliates
    have incurred are reimbursable by us.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our partnership agreement does not restrict our general partner
    from causing us to pay it or its affiliates for any services
    rendered, or from entering into additional contractual
    arrangements with any of these entities on our behalf, so long
    as the terms of any such payments or additional contractual
    arrangements are fair and reasonable to us.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our general partner controls the enforcement of obligations owed
    to us by it and its affiliates.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our general partner decides whether to retain separate counsel,
    accountants or others to perform services for us.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    partnership agreement limits our general partner&#146;s
    fiduciary duties to us and our unitholders and restricts the
    remedies available to our unitholders for actions taken by our
    general partner that might otherwise constitute breaches of
    fiduciary duty.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement contains provisions that reduce the
    standards to which our general partner would otherwise be held
    by state fiduciary duty law. For example, our partnership
    agreement:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    permits our general partner to make a number of decisions in its
    individual capacity, as opposed to in its capacity as our
    general partner. This entitles our general partner to consider
    only the interests and factors that it desires, and it has no
    duty or obligation to give any consideration to any interest of,
    or factors affecting, us, our affiliates or any limited partner;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provides that our general partner is entitled to make other
    decisions in &#147;good faith&#148; if it reasonably believes
    that the decisions are in our best interests;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    generally provides that affiliated transactions and resolutions
    of conflicts of interest not approved by the audit and conflicts
    committee of the board of directors of our general partner and
    not involving a vote of unitholders must be on terms no less
    favorable to us than those generally being provided to or
    available from unrelated third parties or be &#147;fair and
    reasonable&#148; to us and that, in determining whether a
    transaction or resolution is &#147;fair and reasonable,&#148;
    our general partner may consider the totality of the
    relationships among the parties involved, including other
    transactions that may be particularly advantageous or beneficial
    to us;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provides that our general partner and its officers and directors
    will not be liable for monetary damages to us, our limited
    partners or assignees for any acts or omissions unless there has
    been a final and non-appealable judgment entered by a court of
    competent jurisdiction determining that the general partner or
    those other persons acted in bad faith or engaged in fraud,
    willful misconduct or gross negligence.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to become a limited partner of our partnership, our
    unitholders are required to agree to be bound by the provisions
    in the partnership agreement, including the provisions discussed
    above.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    12
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    general partner has a limited call right that may require you to
    sell your units at an undesirable time or price.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If at any time our general partner and its affiliates own more
    than 90% of our outstanding units, our general partner will have
    the right, but not the obligation, which it may assign to any of
    its affiliates or to us, to acquire all, but not less than all,
    of the units held by unaffiliated persons at a price not less
    than their then-current market price. As a result, you may be
    required to sell your units at an undesirable time or price and
    may not receive any return on your investment. You may also
    incur a tax liability upon a sale of your units. As of
    May&#160;31, 2007, affiliates of our general partner, excluding
    Enterprise GP Holdings L.P., own approximately 37.4% of our
    common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We own
    an interstate pipeline that is subject to rate regulation by the
    Federal Energy Regulatory Commission and, in the event that 15%
    or more of our outstanding common units, in the aggregate, are
    held by persons who are not eligible holders, common units held
    by persons who are not eligible holders will be subject to the
    possibility of redemption at the then-current market
    price.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We own an interstate pipeline that is subject to rate regulation
    of the Federal Energy Regulatory Commission, or FERC, and as a
    result our general partner has the right under our partnership
    agreement to institute procedures, by giving notice to each of
    our unitholders, that would require transferees of common units
    and, upon the request of our general partner, existing holders
    of our common units to certify that they are Eligible Holders.
    The purpose of these certification procedures would be to enable
    us to utilize a federal income tax expense as a component of the
    pipeline&#146;s rate base upon which tariffs may be established
    under FERC rate-making policies applicable to entities that
    pass-through their taxable income to their owners. Eligible
    Holders are individuals or entities subject to United States
    federal income taxation on the income generated by us or
    entities not subject to United States federal income taxation on
    the income generated by us, so long as all of the entity&#146;s
    owners are subject to such taxation. If these tax certification
    procedures are implemented and 15% or more of our outstanding
    common units are held by persons who are not Eligible Holders,
    we will have the right to redeem the units held by persons who
    are not Eligible Holders at the then-current market price. The
    redemption price would be paid in cash or by delivery of a
    promissory note, as determined by our general partner.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP
    may issue additional ETP units, which may increase the risk that
    ETP will not have sufficient Available Cash to maintain or
    increase its per unit distribution level.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP has wide latitude to issue additional units on terms and
    conditions established by its general partner. The payment of
    distributions on those additional units may increase the risk
    that ETP may not have sufficient cash available to maintain or
    increase its per unit distribution level, which in turn may
    impact the available cash that we have to distribute to our
    unitholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The issuance of additional common units or other equity
    securities of equal rank will have the following effects:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our unitholders&#146; proportionate ownership interest in ETP
    will decrease;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount of cash available for distribution on each common
    unit may decrease;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the market price of our common units may decline.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, our partnership agreement does not give our
    unitholders the right to approve our issuance of equity
    securities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to Energy Transfer Partners&#146; Business</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Since our cash flows consist exclusively of distributions from
    ETP, risks to ETP&#146;s business are also risks to us. We have
    set forth below risks to ETP&#146;s business, the occurrence of
    which could have a negative impact on ETP&#146;s financial
    performance and decrease the amount of cash it is able to
    distribute to us, thereby impacting the amount of cash that we
    are able to distribute to our unitholders.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    13
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    profitability of ETP&#146;s midstream and transportation and
    storage businesses is, to an extent, dependent upon natural gas
    commodity prices, price spreads between two or more physical
    locations and market demand for natural gas and NGLs, which are
    factors beyond ETP&#146;s control and have been
    volatile.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Income from ETP&#146;s midstream, transportation and storage
    business is exposed to risks due to fluctuations in commodity
    prices. For a portion of the natural gas gathered at the
    Southeast Texas System, the North Texas System, and at
    ETP&#146;s Houston Pipe Line System, ETP purchases natural gas
    from producers at the wellhead at a price that is at a discount
    to a specified index price and then gathers and delivers the
    natural gas to pipelines where ETP typically resells the natural
    gas at the index price. Generally, the gross margins ETP
    realizes under these discount-to-index arrangements decrease in
    periods of low natural gas prices because these gross margins
    are based on a percentage of the index price.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For a portion of the natural gas gathered at the Southeast Texas
    System and North Texas System, ETP enters into
    percentage-of-proceeds arrangements and keep-whole arrangements,
    pursuant to which ETP agrees to gather and process natural gas
    received from the producers. Under percentage-of-proceeds
    arrangements, ETP generally sells the residue gas and NGLs at
    market prices and remits to the producers an agreed upon
    percentage of the proceeds based on an index price. In other
    cases, instead of remitting cash payments to the producer, ETP
    delivers an agreed upon percentage of the residue gas and NGL
    volumes to the producer and sells the volumes it keeps to third
    parties at market prices. Under these arrangements, ETP&#146;s
    revenues and gross margins decline when natural gas prices and
    NGL prices decrease. Accordingly, a decrease in the price of
    natural gas or NGLs could have an adverse effect on ETP&#146;s
    results of operations. Under keep-whole arrangements, ETP
    generally sells the NGLs produced from its gathering and
    processing operations to third parties at market prices. Because
    the extraction of the NGLs from the natural gas during
    processing reduces the Btu content of the natural gas, ETP must
    either purchase natural gas at market prices for return to
    producers or make a cash payment to producers equal to the value
    of this natural gas. Under these arrangements, ETP&#146;s
    revenues and gross margins decrease when the price of natural
    gas increases relative to the price of NGLs if ETP is not able
    to bypass its processing plants and sell the unprocessed natural
    gas.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the past, the prices of natural gas and NGLs have been
    extremely volatile, and ETP expects this volatility to continue.
    For example, during the nine months ended May&#160;31, 2007, the
    NYMEX settlement price for the prompt month contract ranged from
    a high of $8.87 per million British thermal units, or MMBtu, to
    a low of $4.20 per MMBtu. A composite of the Mt. Belvieu average
    NGLs price based upon ETP&#146;s average NGLs composition during
    the nine months ended May&#160;31, 2007 ranged from a high of
    approximately $1.08 per gallon to a low of approximately $0.83
    per gallon.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s average realized natural gas sales prices for the
    nine months ended May&#160;31, 2007 were lower than ETP&#146;s
    historical realized natural gas prices. For example, ETP&#146;s
    average realized natural gas price decreased $1.88, or 24%, from
    $8.00 per MMBtu for the year ended August&#160;31, 2006 to $6.12
    per MMBtu for the nine months ended May&#160;31, 2007. On
    August&#160;14, 2007, the NYMEX settlement price for September
    2007 natural gas deliveries was $6.94 per MMBtu, which was 13.4%
    higher than ETP&#146;s average natural gas price for the nine
    months ended May&#160;31, 2007. Natural gas prices are subject
    to significant fluctuations, and ETP cannot assure you that
    natural gas prices will remain at the high levels recently
    experienced. ETP&#146;s Oasis Pipeline, East Texas Pipeline
    System, ET Fuel System and Houston Pipe Line System receive fees
    for transporting natural gas for its customers. Although a
    significant amount of the pipeline capacity of the East Texas
    Pipeline System and various pipeline segments of the ET Fuel
    System is committed under long-term fee-based contracts, the
    remaining capacity of ETP&#146;s transportation pipelines is
    subject to fluctuation in demand based on the markets and prices
    for natural gas and NGLs, which factors may result in decisions
    by natural gas producers to reduce production of natural gas
    during periods of lower prices for natural gas and NGLs or may
    result in decisions by end users of natural gas and NGLs to
    reduce consumption of these fuels during periods of higher
    prices for these fuels. ETP&#146;s fuel retention fees are also
    directly impacted by changes in natural gas prices. Increases in
    natural gas prices tend to increase ETP&#146;s fuel retention
    fees, and decreases in natural gas prices tend to decrease its
    fuel retention fees.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    14
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The markets and prices for natural gas and NGLs depend upon
    factors beyond ETP&#146;s control. These factors include demand
    for oil, natural gas and NGLs, which fluctuate with changes in
    market and economic conditions, and other factors, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the impact of weather on the demand for oil and natural gas;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of domestic oil and natural gas production;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the availability of imported oil and natural gas;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    actions taken by foreign oil and gas producing nations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the availability of local, intrastate and interstate
    transportation systems;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the price, availability and marketing of competitive fuels;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the demand for electricity;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the impact of energy conservation efforts;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the extent of governmental regulation and taxation.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    use of derivative financial instruments could result in material
    financial losses by ETP.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    From time to time, ETP has sought to limit a portion of the
    adverse effects resulting from changes in natural gas and other
    commodity prices and interest rates by using derivative
    financial instruments and other hedging mechanisms and by the
    activities ETP conducts in its trading operations. To the extent
    that ETP hedges its commodity price and interest rate exposures,
    it foregoes the benefits it would otherwise experience if
    commodity prices or interest rates were to change in ETP&#146;s
    favor. In addition, even though monitored by management,
    ETP&#146;s hedging and trading activities can result in losses.
    Such losses could occur under various circumstances, including
    if a counterparty does not perform its obligations under the
    hedge arrangement, the hedge is imperfect, or hedging policies
    and procedures are not followed.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    success depends upon our ability to continually contract for new
    sources of natural gas supply.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to maintain or increase throughput levels on ETP&#146;s
    gathering and transportation pipeline systems and asset
    utilization rates at its treating and processing plants, ETP
    must continually contract for new natural gas supplies and
    natural gas transportation services. ETP may not be able to
    obtain additional contracts for natural gas supplies for its
    natural gas gathering systems, and it may be unable to maintain
    or increase the levels of natural gas throughput on its
    transportation pipelines. The primary factors affecting
    ETP&#146;s ability to connect new supplies of natural gas to its
    gathering systems include its success in contracting for
    existing natural gas supplies that are not committed to other
    systems and the level of drilling activity and production of
    natural gas near ETP&#146;s gathering systems or in areas that
    provide access to its transportation pipelines or markets to
    which its systems connect. The primary factors affecting
    ETP&#146;s ability to attract customers to its transportation
    pipelines consist of its access to other natural gas pipelines,
    natural gas markets, natural gas-fired power plants and other
    industrial end-users and the level of drilling and production of
    natural gas in areas connected to these pipelines and systems.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Fluctuations in energy prices can greatly affect production
    rates and investments by third parties in the development of new
    oil and natural gas reserves. Drilling activity and production
    generally decrease as oil and natural gas prices decrease. ETP
    has no control over the level of drilling activity in its areas
    of operation, the amount of reserves underlying the wells and
    the rate at which production from a well will decline, sometimes
    referred to as the &#147;decline rate.&#148; In addition, ETP
    has no control over producers or their production decisions,
    which are affected by, among other things, prevailing and
    projected energy prices, demand for hydrocarbons, the level of
    reserves, geological considerations, governmental regulation and
    the availability and cost of capital.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A substantial portion of ETP&#146;s assets, including its
    gathering systems and its processing and treating plants, are
    connected to natural gas reserves and wells for which the
    production will naturally decline over
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    15
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    time. Accordingly, ETP&#146;s cash flows will also decline
    unless it is able to access new supplies of natural gas by
    connecting additional production to these systems.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s transportation pipelines are also dependent upon
    natural gas production in areas served by its pipelines or in
    areas served by other gathering systems or transportation
    pipelines that connect with its transportation pipelines. A
    material decrease in natural gas production in ETP&#146;s areas
    of operation or in other areas that are connected to ETP&#146;s
    areas of operation by third party gathering systems or
    pipelines, as a result of depressed commodity prices or
    otherwise, would result in a decline in the volume of natural
    gas ETP handles, which would reduce ETP&#146;s revenues and
    operating income. In addition, ETP&#146;s future growth will
    depend, in part, upon whether it can contract for additional
    supplies at a greater rate than the natural decline rate in
    ETP&#146;s currently connected supplies.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Transwestern derives a significant portion of its revenue from
    charges to its customers for reservation of capacity, which
    charges Transwestern receives regardless of whether these
    customers actually use the reserved capacity. Transwestern also
    generates revenue from transportation of natural gas for
    customers without reserved capacity. As the reserves available
    through the supply basins connected to Transwestern&#146;s
    systems naturally decline, a decrease in development or
    production activity could cause a decrease in the volume of
    natural gas available for transmission or a decrease in the
    demand for natural gas transportation on the Transwestern system
    in the long run. Investments by third parties in the development
    of new natural gas reserves connected to Transwestern&#146;s
    facilities depend on many factors beyond Transwestern&#146;s
    control.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The volumes of natural gas ETP transports on its pipelines may
    be reduced in the event that the prices at which natural gas is
    purchased and sold at the Waha Hub, the Katy Hub, the Carthage
    Hub and the Houston Ship Channel Hub, the four major natural gas
    trading hubs served by ETP&#146;s pipelines, become unfavorable
    in relation to prices for natural gas at other natural gas
    trading hubs or in other markets as customers may elect to
    transport their natural gas to these other hubs or markets using
    pipelines other than those ETP operates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP
    may not be able to fully execute its growth strategy if it
    encounters illiquid capital markets or increased competition for
    qualified assets.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s strategy contemplates growth through the development
    and acquisition of a wide range of midstream, transportation,
    storage, propane and other energy infrastructure assets while
    maintaining a strong balance sheet. This strategy includes
    constructing and acquiring additional assets and businesses to
    enhance its ability to compete effectively and diversify its
    asset portfolio, thereby providing more stable cash flow. ETP
    regularly considers and enters into discussions regarding, and
    are currently contemplating, the acquisition of additional
    assets and businesses, stand alone development projects or other
    transactions that ETP believes will present opportunities to
    realize synergies and increase its cash flow.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Consistent with ETP&#146;s acquisition strategy, management is
    continuously engaged in discussions with potential sellers
    regarding the possible acquisition of additional assets or
    businesses. Such acquisition efforts may involve ETP
    management&#146;s participation in processes that involve a
    number of potential buyers, commonly referred to as
    &#147;auction&#148; processes, as well as situations in which
    ETP believes it is the only party or one of a very limited
    number of potential buyers in negotiations with the potential
    seller. ETP cannot provide assurance that its current or future
    acquisition efforts will be successful or that any such
    acquisition will be completed on terms considered favorable to
    ETP.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, ETP is experiencing increased competition for the
    assets it purchases or contemplates purchasing. Increased
    competition for a limited pool of assets could result in ETP
    losing to other bidders more often or acquiring assets at higher
    prices. Either occurrence would limit ETP&#146;s ability to
    fully execute its growth strategy. Inability to execute its
    growth strategy may materially adversely impact the market price
    of ETP&#146;s securities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If ETP
    does not make acquisitions on economically acceptable terms, its
    future growth could be limited.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s results of operations and its ability to grow and to
    increase distributions to unitholders will depend, in part, on
    its ability to make acquisitions that are accretive to
    ETP&#146;s distributable cash flow per unit.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    16
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP may be unable to make accretive acquisitions for any of the
    following reasons, among others:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    because ETP is unable to identify attractive acquisition
    candidates or negotiate acceptable purchase contracts with them;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    because ETP is unable to raise financing for such acquisitions
    on economically acceptable terms;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    because ETP is outbid by competitors, some of which are
    substantially larger than ETP and have greater financial
    resources and lower costs of capital then it does.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, even if ETP consummates acquisitions that it
    believes will be accretive, those acquisitions may in fact
    adversely affect its results of operations or result in a
    decrease in distributable cash flow per unit. Any acquisition
    involves potential risks, including the risk that ETP may:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fail to realize anticipated benefits, such as new customer
    relationships, cost-savings or cash flow enhancements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    decrease its liquidity by using a significant portion of its
    available cash or borrowing capacity to finance acquisitions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    significantly increase its interest expense or financial
    leverage if ETP incurs additional debt to finance acquisitions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    encounter difficulties operating in new geographic areas or new
    lines of business;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    incur or assume unanticipated liabilities, losses or costs
    associated with the business or assets acquired for which ETP is
    not indemnified or for which the indemnity is inadequate;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    be unable to hire, train or retrain qualified personnel to
    manage and operate its growing business and assets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    less effectively manage its historical assets, due to the
    diversion of ETP management&#146;s attention from other business
    concerns;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    incur other significant charges, such as impairment of goodwill
    or other intangible assets, asset devaluation or restructuring
    charges.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If ETP consummates future acquisitions, its capitalization and
    results of operations may change significantly. As ETP
    determines the application of its funds and other resources, you
    will not have an opportunity to evaluate the economics,
    financial and other relevant information that ETP will consider.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If ETP
    does not continue to construct new pipelines, its future growth
    could be limited.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the past several years, ETP has constructed several new
    pipelines, and ETP is currently involved in constructing several
    new pipelines. ETP&#146;s results of operations and its ability
    to grow and to increase distributable cash flow per unit will
    depend, in part, on its ability to construct pipelines that are
    accretive to ETP&#146;s distributable cash flow. ETP may be
    unable to construct pipelines that are accretive to
    distributable cash flow for any of the following reasons, among
    others:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    ETP is unable to identify pipeline construction opportunities
    with favorable projected financial returns;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    ETP is unable to raise financing for its identified pipeline
    construction opportunities;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    ETP is unable to secure sufficient natural gas transportation
    commitments from potential customers due to competition from
    other pipeline construction projects or for other reasons.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, even if ETP constructs a pipeline that it believes
    will be accretive, the pipeline may in fact adversely affect its
    results of operations or results from those projected prior to
    commencement of construction and other factors.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    17
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Expanding
    ETP&#146;s business by constructing new pipelines and treating
    and processing facilities subjects it to risks.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    One of the ways that ETP has grown its business is through the
    construction of additions to its existing gathering,
    compression, treating, processing and transportation systems.
    The construction of a new pipeline or the expansion of an
    existing pipeline, by adding additional compression capabilities
    or by adding a second pipeline along an existing pipeline, and
    the construction of new processing or treating facilities,
    involve numerous regulatory, environmental, political and legal
    uncertainties beyond ETP&#146;s control and require the
    expenditure of significant amounts of capital that ETP will be
    required to finance through borrowings, the issuance of
    additional equity or from operating cash flow. If ETP undertakes
    these projects, they may not be completed on schedule or at all
    or at the budgeted cost. Moreover, ETP&#146;s revenues may not
    increase immediately following the completion of particular
    projects. For instance, if ETP builds a new pipeline, the
    construction will occur over an extended period of time, but ETP
    may not materially increase its revenues until long after the
    project&#146;s completion. Moreover, ETP may construct
    facilities to capture anticipated future growth in production in
    a region in which such growth does not materialize. As a result,
    new facilities may be unable to attract enough throughput or
    contracted capacity reservation commitments to achieve
    ETP&#146;s expected investment return, which could adversely
    affect its results of operations and financial condition. As a
    result, the success of a pipeline construction project will
    likely depend upon the level of natural gas exploration and
    development drilling activity and the demand for pipeline
    transportation in the areas proposed to be serviced by the
    project as well as ETP&#146;s ability to obtain commitments from
    producers in this area to utilize the newly constructed
    pipelines.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP
    depends on certain key producers for its supply of natural gas
    on the Southeast Texas System and North Texas System, and the
    loss of any of these key producers could adversely affect its
    financial results.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For ETP&#146;s nine months ended May&#160;31, 2007, Anadarko
    E&#038;P Company, LP, Southern Bay Operating, LLC and Chesapeake
    Energy Corp. supplied ETP with approximately 52% of the
    Southeast Texas System&#146;s natural gas supply. For ETP&#146;s
    nine months ended May&#160;31, 2007, Encana Oil and Gas (USA),
    Inc., XTO Energy Inc., and Chesapeake Energy Marketing, Inc.
    supplied ETP with approximately 58% of the North Texas
    System&#146;s natural gas supply. ETP is not the only option
    available to these producers for disposition of the natural gas
    they produce. To the extent that these and other producers may
    reduce the volumes of natural gas that they supply ETP, ETP
    would be adversely affected unless it was able to acquire
    comparable supplies of natural gas from other producers.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP
    depends on key customers to transport natural gas on its ETC
    Katy Pipeline System, ET Fuel System and HPL
    System.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP has nine- and ten-year fee-based transportation contracts
    with XTO Energy, Inc. pursuant to which XTO Energy has committed
    to transport certain minimum volumes of natural gas on
    ETP&#146;s pipelines. ETP also has an eight-year fee-based
    transportation contract with TXU Portfolio Management Company,
    L.P., a subsidiary of TXU Corp., which is referred to as TXU
    Shipper, to transport natural gas on the ET Fuel System to
    TXU&#146;s electric generating power plants. ETP has also
    entered into two eight-year natural gas storage contracts with
    TXU Shipper to store natural gas at the two natural gas storage
    facilities that are part of the ET Fuel System. Each of the
    contracts with TXU Shipper may be extended by TXU Shipper for
    two additional five-year terms. The failure of XTO Energy or TXU
    Shipper to fulfill their contractual obligations under these
    contracts could have a material adverse effect on ETP&#146;s
    cash flow and results of operations if ETP was not able to
    replace these customers under arrangements that provide similar
    economic benefits as these existing contracts.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP completed its 42&#148; pipeline expansion to Carthage in
    April 2007. The major shippers through the 42&#148; pipeline
    expansion to interstate and intrastate markets are XTO Energy,
    Inc., EOG Resources, Inc., Chesapeake Energy Marketing, Inc.,
    Encana Marketing (USA), Inc. Quicksilver Resources, Inc. and
    Leor Energy, L.P. These shippers have long-term contracts
    ranging from five to 10&#160;years. The failure of these
    shippers to fulfill their contractual obligations could have a
    material adverse effect on ETP&#146;s cash flow and results of
    operations
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    18
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    if ETP was not able to replace these customers under
    arrangements that provide similar economic benefits as these
    existing contracts.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Federal,
    state or local regulatory measures could adversely affect
    ETP&#146;s business.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s natural gas gathering and intrastate transportation
    activities are generally exempt from Federal Energy Regulatory
    Commission, or FERC, regulation under the Natural Gas Act of
    1938, or NGA, but FERC regulation still significantly affects
    ETP&#146;s business and the market for its products. The rates,
    terms and conditions of some of the transportation and storage
    services ETP provides on the Houston Pipe Line, the ETC Katy
    Pipeline, the Oasis Pipeline and the ET Fuel System are subject
    to FERC regulation under Section&#160;311 of the Natural Gas
    Policy Act, or NGPA. Under Section&#160;311, rates charged for
    transportation and storage must be fair and equitable amounts.
    Amounts collected in excess of fair and equitable rates are
    subject to refund with interest, and the terms and conditions of
    service, set forth in the pipeline&#146;s Statement of Operating
    Conditions, are subject to FERC approval. Failure to observe the
    service limitations applicable to storage and transportation
    service under Section&#160;311, failure to comply with the rates
    approved by FERC for Section&#160;311 service, and failure to
    comply with the terms and conditions of service established in
    the pipeline&#146;s FERC-approved Statement of Operating
    Conditions could result in an alteration of jurisdictional
    status
    <FONT style="white-space: nowrap">and/or</FONT> the
    imposition of administrative, civil and criminal penalties.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s intrastate natural gas transportation and storage
    facilities are subject to state regulation in Texas, New Mexico,
    Arizona, Oklahoma, Louisiana, Utah and Colorado, the states in
    which ETP operates these types of pipelines. ETP&#146;s
    intrastate transportation facilities located in Texas are
    subject to regulation as common purchasers and as gas utilities
    by the Texas Railroad Commission, or TRRC. The TRRC&#146;s
    jurisdiction extends to both rates and pipeline safety. The
    rates ETP charges for transportation and storage services are
    deemed just and reasonable under Texas law unless challenged in
    a complaint. Should a complaint be filed or should regulation
    become more active, ETP&#146;s business may be adversely
    affected.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s midstream gathering, processing and intrastate
    transportation operations are also subject to ratable take and
    common purchaser statutes in Texas, New&#160;Mexico, Arizona,
    Oklahoma, Louisiana, Utah and Colorado, the states where ETP
    operates. Ratable take statutes generally require gatherers to
    take, without undue discrimination, natural gas production that
    may be tendered to the gatherer for handling. Similarly, common
    purchaser statutes generally require gatherers to purchase
    without undue discrimination as to source of supply or producer.
    These statutes have the effect of restricting ETP&#146;s right
    as an owner of gathering facilities to decide with whom it
    contracts to purchase or transport natural gas. Federal law
    leaves any economic regulation of natural gas gathering to the
    states, and some of the states in which ETP operates have
    adopted complaint-based or other limited economic regulation of
    natural gas gathering activities. States in which ETP operates
    that have adopted some form of complaint-based regulation, like
    Texas, generally allow natural gas producers and shippers to
    file complaints with state regulators in an effort to resolve
    grievances relating to natural gas gathering rates and access.
    Other state and local regulations also affect ETP&#146;s
    business.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s storage facilities are also subject to the
    jurisdiction of the TRRC. Generally, the TRRC has jurisdiction
    over all underground storage of natural gas in Texas, unless the
    facility is part of an interstate gas pipeline facility. Because
    the ET Fuel System and the Houston Pipe Line System natural gas
    storage facilities are only connected to intrastate gas
    pipelines, they fall within the TRRC&#146;s jurisdiction and
    must be operated pursuant to TRRC permit. Certain changes in
    ownership or operation of TRCC-jurisdictional storage
    facilities, such as facility expansions and increases in the
    maximum operating pressure, must be approved by the TRRC through
    an amendment to the facility&#146;s existing permit. In
    addition, the TRRC must approve transfers of the permits. Texas
    laws and regulations also require all natural gas storage
    facilities to be operated to prevent waste, the uncontrolled
    escape of gas, pollution and danger to life or property.
    Accordingly, the TRRC requires natural gas storage facilities to
    implement certain safety, monitoring, reporting and
    record-keeping measures. Violations of the terms and provisions
    of a TRRC permit or a TRRC order or regulation can result in the
    modification, cancellation or suspension of an operating permit
    <FONT style="white-space: nowrap">and/or</FONT> civil
    penalties, injunctive relief, or both.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The states in which ETP conducts operations administer federal
    pipeline safety standards under the Pipeline Safety Act of 1968,
    which requires certain pipeline companies to comply with safety
    standards in
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    19
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    constructing and operating the pipelines, and subjects pipelines
    to regular inspections. Some of ETP&#146;s gathering facilities
    are exempt from the requirements of this Act. In respect to
    recent pipeline accidents in other parts of the country,
    Congress and the Department of Transportation have passed or are
    considering heightened pipeline safety requirements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Failure to comply with applicable regulations under the NGA,
    NGPA, Pipeline Safety Act and certain state laws could result in
    the imposition of administrative, civil and criminal remedies.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    FERC and CFTC are pursuing legal actions against ETP relating to
    certain natural gas trading and transportation activities, and
    related third party claims have been filed against us and
    ETP.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On July&#160;26, 2007, the Federal Energy Regulatory Commission
    (the &#147;FERC&#148;) issued to ETP an Order to Show Cause and
    Notice of Proposed Penalties (the &#147;Order and Notice&#148;)
    that contains allegations that ETP violated FERC rules and
    regulations. The FERC has alleged that ETP engaged in
    manipulative or improper trading activities in the Houston Ship
    Channel, primarily on two dates during the fall of 2005
    following the occurrence of Hurricanes Katrina and Rita, as well
    as on eight other dates from December&#160;2003 though August
    2005, in order to benefit financially from ETP&#146;s
    commodities derivatives positions and from certain of its
    index-priced physical gas purchases in the Houston Ship Channel.
    The FERC has alleged that during these periods ETP violated the
    FERC&#146;s then-effective Market Behavior Rule&#160;2, an
    anti-market manipulation rule promulgated by FERC under
    authority of the Natural Gas Act (&#147;NGA&#148;). ETP
    allegedly violated this rule by artificially suppressing prices
    that were included in the Platts <I>Inside FERC</I> Houston Ship
    Channel index, published by the McGraw&#160;&#150; Hill
    Companies, on which the pricing of many physical natural gas
    contracts and financial derivatives are based. Additionally, the
    FERC has alleged that ETP manipulated daily prices at the Waha
    Hub in west Texas on certain dates in December 2005. The
    FERC&#146;s action against ETP also includes allegations related
    to ETP&#146;s Oasis Pipeline, an intrastate pipeline that
    transports natural gas between the Waha Hub and the Katy Hub
    near Houston, Texas. The Oasis Pipeline also transports
    interstate natural gas pursuant to Natural Gas Policy Act
    (&#147;NGPA&#148;) Section&#160;311 authority, and subject to
    FERC-approved rates, terms and conditions of service. The
    allegations related to the Oasis Pipeline include claims that
    the Oasis Pipeline violated NGPA regulations from
    January&#160;26, 2004 through June&#160;30, 2006 by granting
    undue preference to its affiliates for interstate NGPA
    Section&#160;311 pipeline service to the detriment of similarly
    situated non-affiliated shippers and by charging in excess of
    the FERC-approved maximum lawful rate for interstate NGPA
    Section&#160;311 transportation. The FERC also seeks to revoke,
    for a period of 12&#160;months, ETP&#146;s blanket marketing
    authority for sales of natural gas in interstate commerce at
    negotiated rates, which activity is expected to account for
    approximately 1.0% of ETP&#146;s EBITDA for its 2007 fiscal
    year. If the FERC is successful in revoking ETP&#146;s blanket
    marketing authority, ETP&#146;s sales of natural gas at
    market-based rates would be limited to sales of natural gas to
    retail customers (such as utilities and other end-users) and
    sales from its own production, and any other sales of natural
    gas by ETP would be required to be made at prices that would be
    subject to FERC approval. Also on July&#160;26, 2007, the United
    States Commodity Futures Trading Commission (the
    &#147;CFTC&#148;) filed suit in United States District Court for
    the Northern District of Texas alleging that ETP violated
    provisions of the Commodity Exchange Act by attempting to
    manipulate natural gas prices in the Houston Ship Channel. It is
    alleged that such manipulation was attempted during the period
    from late September through early December 2005 to allow ETP to
    benefit financially from ETP&#146;s commodities derivatives
    positions.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In its Order and Notice, the FERC is seeking $70.1&#160;million
    in disgorgement of profits, plus interest, and
    $97.5&#160;million in civil penalties relating to these matters.
    The FERC ordered ETP to show cause why the allegations against
    ETP made in the Order and Notice are not true. ETP filed its
    response to the Order and Notice with the FERC on
    October&#160;9, 2007, which response refuted the FERC&#146;s
    claims and requested a dismissal of the FERC proceeding. The
    FERC has taken the position that, once it receives ETP&#146;s
    response, it has several options as to how to proceed, including
    issuing an order on the merits, requesting briefs, or setting
    specified issues for a trial-type hearing before an
    administrative law judge. In its lawsuit, the CFTC is seeking
    civil penalties of $130,000 per violation, or three times the
    profit gained from each violation, and other ancillary relief.
    The CFTC has not specified the number of alleged violations or
    the amount of alleged profit related to the matters specified in
    its complaint. On October&#160;15, 2007, ETP filed a motion to
    dismiss in the
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    20
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
     United States District Court for the Northern District of Texas
    on the basis that the CFTC has not stated a valid cause of
    action under the Commodity Exchange Act.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is ETP&#146;s position that its trading and transportation
    activities during the periods at issue complied in all material
    respects with applicable laws and regulations, and ETP intends
    to contest these cases vigorously. However, the laws and
    regulations related to alleged market manipulation are vague,
    subject to broad interpretation, and offer little guiding
    precedent, while at the same time the FERC and CFTC hold
    substantial enforcement authority. At this time, neither we nor
    ETP is able to predict the final outcome of these matters.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the FERC and CFTC legal actions, it is also
    possible that third parties will assert claims against ETP and
    ETE for damages related to these matters, which parties could
    include natural gas producers, royalty owners, taxing
    authorities, and parties to physical natural gas contracts and
    financial derivatives based on the Platts <I>Inside FERC
    </I>Houston Ship Channel index during the periods in question.
    In this regard, two natural gas producers have initiated legal
    proceedings against ETP and ETE for claims related to the FERC
    and CFTC claims. One of the producers has brought suit in Texas
    state court against ETP and ETE based on contractual and tort
    claims relating to alleged manipulation of natural gas prices at
    the Waha Hub in West Texas and the Houston Ship Channel and is
    seeking unspecified direct, indirect, consequential and punitive
    damages. The second producer has brought suit in Texas state
    court against ETP and ETE based on contract and tort claims
    relating to a natural gas purchase contract to which ETP and
    this producer are parties. This producer seeks unspecified
    damages and requests pre-arbitration discovery of information
    related to ETP&#146;s activities prior to further pursuing a
    claim for manipulation of natural gas prices in the Houston Ship
    Channel. The producer also seeks to intervene in the FERC
    proceeding, alleging that it is entitled to a FERC-ordered
    refund of $5.9&#160;million, plus interest and costs. In
    addition, a plaintiff has filed a putative class action against
    ETP in the United States District Court for the Southern
    District of Texas. This suit alleges that ETP unlawfully
    manipulated the price of natural gas futures and options
    contracts on the New York Mercantile Exchange, or NYMEX, in
    violation of the Commodity Exchange Act, that ETP has the market
    power to manipulate index prices, and that ETP used this market
    power to artificially depress the index prices at major natural
    gas trading hubs, including the Houston Ship Channel, Waha, and
    Permian hubs, in order to benefit ETP&#146;s natural gas
    physical and financial trading positions. The suit alleges that
    this unlawful depression of index prices by ETP manipulated the
    NYMEX prices for natural gas futures and options contracts to
    artificial levels between December&#160;29, 2003 and
    December&#160;31, 2005, causing unspecified damages to plaintiff
    and all others who purchased
    <FONT style="white-space: nowrap">and/or</FONT> sold
    natural gas futures and options contracts on NYMEX during that
    period.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are expensing the legal fees, consultants&#146; fees and
    related expenses relating to these matters in the periods in
    which such expenses are incurred. In addition, our existing
    accruals for litigation and contingencies include an accrual
    related to these matters. At this time, we are unable to predict
    the outcome of these matters; however, it is possible that the
    amount we become obligated to pay as a result of the final
    resolution of these matters, whether on a negotiated settlement
    basis or otherwise, will exceed the amount of our existing
    accrual related to these matters. In accordance with applicable
    accounting standards, we will review the amount of our accrual
    related to these matters as developments related to these
    matters occur and we will adjust our accrual if we determine
    that it is probable that the amount we may ultimately become
    obligated to pay as a result of the final resolution of these
    matters is greater than the amount of our existing accrual for
    these matters. As our accrual amounts are non-cash, any cash
    payment of an amount in resolution of these matters would likely
    be made from cash from operations or borrowings, which payments
    would reduce our cash available for distributions either
    directly or as a result of increased principal and interest
    payments necessary to service any borrowings incurred to finance
    such payments. If these payments are substantial, we may
    experience a material adverse impact on our results of
    operations, cash available for distribution and our liquidity.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Transwestern
    is subject to laws, regulations and policies governing the rates
    it is allowed to charge for its services.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Laws, regulations and policies governing interstate natural gas
    pipeline rates could affect Transwestern&#146;s ability to
    establish rates, to charge rates that would cover future
    increases in its costs, or to continue to collect rates that
    cover current costs. Natural gas companies must charge rates
    that are deemed to be just and reasonable by FERC. The rates,
    terms and conditions of service provided by natural gas
    companies are
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    21
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
     required to be on file with FERC in FERC-approved tariffs.
    Pursuant to the Natural Gas Act, existing rates may be
    challenged by complaint and rate increases proposed by the
    natural gas company may be challenged by protest. Further, other
    than for rates set under market-based rate authority, rates must
    be cost-based and the FERC may order refunds of amounts
    collected under rates that were in excess of a just and
    reasonable level. Transwestern filed a general rate case in
    September 2006. The rates in this proceeding were settled and
    are final and no longer subject to refund. Transwestern is not
    required to file new cost-based rates until October 2011. In
    addition, shippers (other than shippers who have agreed not to
    challenge our tariff rates through 2010 pursuant to our recent
    settlement agreement with these shippers) may challenge the
    lawfulness of tariff rates that have become final and effective.
    The FERC may also investigate such rates absent shipper
    complaint. Any successful complaint or protest against
    Transwestern&#146;s rates could reduce our revenues associated
    with providing transmission services on a prospective basis. We
    cannot assure you that we will be able to recover all of
    Transwestern&#146;s costs through existing or future rates.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    ability of interstate pipelines held in tax-pass-through
    entities, like ETP, to include an allowance for income taxes in
    their regulated rates has been subject to extensive litigation
    before FERC and the courts, and the FERC&#146;s current policy
    is subject to future refinement or change.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The ability of interstate pipelines held in tax-pass-through
    entities, like ETP, to include an allowance for income taxes as
    a cost-of-service element in their regulated rates has been
    subject to extensive litigation before FERC and the courts for a
    number of years. In July 2004, the D.C. Circuit issued its
    opinion in <I>BP West Coast Products, LLC&#160;v. FERC</I>,
    which upheld, among other things, the FERC&#146;s determination
    that certain rates of an interstate petroleum products pipeline,
    Santa&#160;Fe Pacific Pipeline, or SFPP, were grandfathered
    rates under the Energy Policy Act of 1992 and that SFPP&#146;s
    shippers had not demonstrated substantially changed
    circumstances that would justify modification to those rates.
    The Court also vacated the portion of the FERC&#146;s decision
    applying the <I>Lakehead </I>policy. In the <I>Lakehead
    </I>decision, the FERC allowed an oil pipeline publicly traded
    partnership to include in its cost-of-service an income tax
    allowance to the extent that its unitholders were corporations
    subject to income tax. In May and June 2005, the FERC issued a
    statement of general policy, as well as an order on remand of
    <I>BP West Coast</I>, respectively, in which the FERC stated it
    will permit pipelines to include in cost-of-service a tax
    allowance to reflect actual or potential income tax liability on
    their public utility income attributable to all partnership or
    limited liability company interests, if the ultimate owner of
    the interest has an actual or potential income tax liability on
    such income. Whether a pipeline&#146;s owners have such actual
    or potential income tax liability will be reviewed by the FERC
    on a
    <FONT style="white-space: nowrap">case-by-case</FONT>
    basis. Although the new policy is generally favorable for
    pipelines that are organized as, or owned by,
    <FONT style="white-space: nowrap">tax-pass-through</FONT>
    entities, it still entails rate risk due to the
    <FONT style="white-space: nowrap">case-by-case</FONT>
    review requirement. In December 2005, the FERC issued its first
    case-specific oil pipeline review of the income tax allowance
    issues in the SFPP proceeding, reaffirming its new income tax
    allowance policy and directing SFPP to provide certain evidence
    necessary for the pipeline to determine its income allowance.
    Further, in the December 2005 order, the FERC concluded that for
    tax allowance purposes, the FERC would apply a rebuttable
    presumption that corporate partners of pass-through entities pay
    the maximum marginal tax rate of 35% and that non-corporate
    partners of pass-through entities pay a marginal rate of 28%.
    The FERC indicated that it would address the income tax
    allowance issues further in the context of SFPP&#146;s
    compliance filing submitted in March 2006. In December 2006, the
    FERC ruled on some of the issues raised as to the March 2006
    SFPP compliance filing, upholding most of its determinations in
    the December 2005 order. FERC did revise its rebuttable
    presumption as to corporate partners&#146; marginal tax rate
    from 35% to 34%. The FERC&#146;s <I>BP West Coast </I>remand
    decision and the new income tax allowance policy were appealed
    to the D.C. Circuit. In May 2007, the D.C. Circuit affirmed
    FERC&#146;s favorable income tax allowance policy. As a result,
    we remain eligible to include an allowance in the tariff rates
    we charge for natural gas transportation on our Transwestern
    interstate pipeline system, subject to our ability to
    demonstrate compliance with FERC&#146;s policy. The specific
    terms and application of that policy remain subject to future
    refinement or change by FERC and the courts. As FERC has
    recently approved our tariff rates specified in a settlement
    agreement with shippers, the allowance for income taxes as a
    cost-of-service element in our tariff rates is not subject to
    challenge prior to the expiration of this settlement agreement
    in 2011.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    22
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Transwestern
    is subject to laws, regulations and policies governing terms and
    conditions of service, which control many aspects of its
    business.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to rate oversight, FERC&#146;s regulatory authority
    extends to many other aspects of Transwestern&#146;s business
    and operations, including:
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    operating terms and conditions of service;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the types of services Transwestern may offer to its customers;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    construction of new facilities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    acquisition, extension or abandonment of services or facilities;
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reporting and information posting requirements;
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    accounts and records;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    relationships with affiliated companies involved in all aspects
    of the natural gas and energy businesses.
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Compliance with these requirements can be costly and burdensome.
    Future changes to laws, regulations and policies in these areas
    may impair Transwestern&#146;s ability to compete for business
    or increase the cost and burden of operation.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Failure to comply with all applicable FERC-administered
    statutes, rules, regulations and orders, could bring substantial
    penalties and fines. Under the Energy Policy Act of 2005, FERC
    has civil penalty authority under the Natural Gas Act to impose
    penalties for violations after August&#160;8, 2005 up to
    $1.0&#160;million per day for each violation.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Finally, we cannot give any assurance regarding the likely
    future regulations under which we will operate Transwestern or
    the effect such regulation could have on our business, financial
    condition, and results of operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP&#146;s
    business involves hazardous substances and may be adversely
    affected by environmental regulation.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s natural gas midstream, transportation and storage, as
    well as its propane businesses are subject to stringent federal,
    state, and local environmental laws and regulations governing
    the discharge of materials into the environment or otherwise
    relating to environmental protection. These laws and regulations
    may require the acquisition of permits for its operations,
    result in capital expenditures to manage, limit, or prevent
    emissions, discharges, or releases of various materials from
    ETP&#146;s pipelines, plants, and facilities, and impose
    substantial liabilities for pollution resulting from its
    operations. Several governmental authorities, such as the
    U.S.&#160;Environmental Protection Agency or EPA, have the power
    to enforce compliance with these laws and regulations and the
    permits issued under them and frequently mandate difficult and
    costly remediation measures and other actions. Failure to comply
    with these laws, regulations, and permits may result in the
    assessment of administrative, civil, and criminal penalties, the
    imposition of remedial obligations, and the issuance of
    injunctive relief.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP may incur substantial environmental costs and liabilities
    because the underlying risks are inherent to its operations.
    Joint and several, strict liability may be incurred under
    environmental laws and regulations in connection with discharges
    or releases of petroleum hydrocarbons or wastes on, under, or
    from its properties and facilities, many of which have been used
    for industrial activities for a number of years. Private
    parties, including the owners of properties through which
    ETP&#146;s gathering systems pass or facilities where its
    petroleum hydrocarbons or wastes are taken for reclamation or
    disposal, may also have the right to pursue legal actions to
    enforce compliance as well as to seek damages for non-compliance
    with environmental laws and regulations or for personal injury
    or property damage. The total accrued future estimated cost of
    remediation activities relating to ETP&#146;s Transwestern
    Pipeline operations is approximately $12.3&#160;million, which
    activities are expected to continue for several years.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    23
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Changes in environmental laws and regulations occur frequently,
    and any such changes that result in more stringent and costly
    waste handling, storage, transport disposal or remediation
    requirements could have a material adverse effect on ETP&#146;s
    operations or financial position. For instance, the Texas
    Commission on Environmental Quality, or TCEQ, recently adopted a
    rule further restricting the level of nitrogen oxides, or NOx,
    that may be emitted from stationary gas-fired reciprocating
    internal combustion engines located in counties comprising the
    Dallas-Fort&#160;Worth eight hour ozone non-attainment area. As
    a result of the adoption of this rule, by March&#160;1, 2009,
    ETP must either modify or replace seven owned and 21 leased
    compressor units currently located in the Dallas-Fort&#160;Worth
    non-attainment area that do not satisfy the TCEQ&#146;s new,
    more stringent NOx emission limitations. ETP is evaluating its
    options to comply with this rule and thus the costs to comply
    currently are not reasonably estimable but such costs ultimately
    could be material to the operations of ETP. Also, the
    U.S.&#160;Congress is actively considering legislation and more
    than a dozen states have already taken legal measures to reduce
    emissions of certain gases, commonly referred to as greenhouse
    gases and including carbon dioxide and methane, that may be
    contributing to warming of the Earth&#146;s atmosphere.
    Moreover, the U.S.&#160;Supreme Court recently decided, in
    <I>Massachusetts, et al.&#160;v. EPA</I>, that greenhouse gases
    fall within the federal Clean Air Act&#146;s definition of
    &#147;air pollutant,&#148; which could result in the regulation
    of greenhouse gas emissions from stationary sources under
    certain Clean Air Act programs. New legislation or regulatory
    programs that restrict emissions of greenhouse gases in areas in
    which we conduct business could have an adverse affect on our
    operations and demand for our services.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Any
    reduction in the capacity of, or the allocations to, ETP&#146;s
    shippers in interconnecting, third-party pipelines could cause a
    reduction of volumes transported in ETP&#146;s pipelines, which
    would adversely affect ETP&#146;s revenues and cash
    flow.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Users of ETP&#146;s pipelines are dependent upon connections to
    and from third-party pipelines to receive and deliver natural
    gas and NGLs. Any reduction in the capacities of these
    interconnecting pipelines due to testing, line repair, reduced
    operating pressures, or other causes could result in reduced
    volumes being transported in ETP&#146;s pipelines. Similarly, if
    additional shippers begin transporting volumes of natural gas
    and NGLs over interconnecting pipelines, the allocations to
    existing shippers in these pipelines would be reduced, which
    could also reduce volumes transported in ETP&#146;s pipelines.
    Any reduction in volumes transported in ETP&#146;s pipelines
    would adversely affect its revenues and cash flow.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP
    encounters competition from other midstream, transportation and
    storage companies and propane companies.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP experiences competition in all of its markets. ETP&#146;s
    principal areas of competition include obtaining natural gas
    supplies for the Southeast Texas System, North Texas System and
    Houston Pipe Line System and natural gas transportation
    customers for its transportation pipeline systems. ETP&#146;s
    competitors include major integrated oil companies, interstate
    and intrastate pipelines and companies that gather, compress,
    treat, process, transport, store and market natural gas. The
    Southeast Texas System competes with natural gas gathering and
    processing systems owned by DLP Midstream, LLC. The East Texas
    Pipeline competes with other natural gas transportation
    pipelines that serve the Bossier Sands area in east Texas and
    the Barnett Shale area of the Fort&#160;Worth Basin in north
    Texas. The ET Fuel System and the Oasis Pipeline compete with a
    number of other natural gas pipelines, including interstate and
    intrastate pipelines that link the Waha Hub. The Fort&#160;Worth
    Basin Pipeline competes with other natural gas transportation
    pipelines serving the Dallas/Ft.&#160;Worth area and other
    pipelines that serve the east central Texas and south Texas
    markets. Pipelines that ETP competes with in these areas include
    those owned by Atmos Energy Corporation, Enterprise Products
    Partners, L.P., and Enbridge, Inc. Some of ETP&#146;s
    competitors may have greater financial resources and access to
    larger natural gas supplies than it does.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The acquisitions of the Houston Pipe Line System in 2005 and the
    Transwestern Pipeline System in 2006 increased the number of
    interstate pipelines and natural gas markets to which ETP has
    access and expanded its principal areas of competition to areas
    such as southeast Texas and the Texas Gulf Coast. As a result of
    ETP&#146;s expanded market presence and diversification, ETP
    faces additional competitors, such as major integrated oil
    companies, interstate and intrastate pipelines and companies
    that gather, compress, treat, process, transport,
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    24
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    store and market natural gas, that may have greater financial
    resources and access to larger natural gas supplies than ETP
    does.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The interstate pipeline business of Transwestern competes with
    those of other interstate and intrastate pipeline companies in
    the transportation and storage of natural gas. The principal
    elements of competition among pipelines are rates, terms of
    service and the flexibility and reliability of service. Natural
    gas competes with other forms of energy available to our
    customers and end-users, including electricity, coal and fuel
    oils. The primary competitive factor is price. Changes in the
    availability or price of natural gas and other forms of energy,
    the level of business activity, conservation, legislation and
    governmental regulations, the capability to convert to alternate
    fuels and other factors, including weather and natural gas
    storage levels, affect the levels of natural gas transportation
    volumes in the areas served by our pipelines.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s propane business competes with a number of large
    national and regional propane companies and several thousand
    small independent propane companies. Because of the relatively
    low barriers to entry into the retail propane market, there is
    potential for small independent propane retailers, as well as
    other companies that may not currently be engaged in retail
    propane distribution, to compete with ETP&#146;s retail outlets.
    As a result, ETP is always subject to the risk of additional
    competition in the future. Generally, warmer-than-normal weather
    further intensifies competition. Most of ETP&#146;s retail
    propane branch locations compete with several other marketers or
    distributors in their service areas. The principal factors
    influencing competition with other retail propane marketers are:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    price,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reliability and quality of service,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    responsiveness to customer needs,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    safety concerns,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    long-standing customer relationships,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the inconvenience of switching tanks and suppliers,&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the lack of growth in the industry.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    inability to continue to access tribal lands could adversely
    affect Transwestern&#146;s ability to operate its pipeline
    system and the inability to recover the cost of right-of-way
    grants on tribal lands could adversely affect its financial
    results.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Transwestern&#146;s ability to operate its pipeline system on
    certain lands held in trust by the United States for the benefit
    of a Native American Tribe, which we refer to as tribal lands,
    will depend on its success in maintaining existing rights-of-way
    and obtaining new rights-of-way on those tribal lands. Securing
    additional rights-of-way is also critical to Transwestern&#146;s
    ability to pursue expansion projects. We cannot provide any
    assurance that Transwestern will be able to acquire new
    rights-of-way on Tribal lands or maintain access to existing
    rights-of-way upon the expiration of the current grants. Our
    financial position could be adversely affected if the costs of
    new or extended right-of-way grants cannot be recovered in rates.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP is
    exposed to the credit risk of its customers, and an increase in
    the nonpayment and nonperformance by its customers could reduce
    its ability to make distributions to its unitholders, including
    to us.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The risks of nonpayment and nonperformance by ETP&#146;s
    customers are a major concern in its business. Participants in
    the energy industry have been subjected to heightened scrutiny
    from the financial markets in light of past collapses and
    failures of other energy companies. ETP is subject to risks of
    loss resulting from nonpayment or nonperformance by its
    customers. Any substantial increase in the nonpayment and
    nonperformance by ETP&#146;s customers could reduce its ability
    to make distributions to its unitholders, including to us.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    25
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP
    may be unable to bypass the La&#160;Grange and North Texas
    processing plants, which could expose it to the risk of
    unfavorable processing margins.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because of ETP&#146;s ownership of the Oasis and ET Fuel
    Pipelines, it can generally elect to bypass the La&#160;Grange
    or North Texas processing plants when processing margins are
    unfavorable and instead deliver pipeline-quality gas by blending
    rich gas from the Southeast Texas System and North Texas System
    with lean gas transported on the Oasis and ET Fuel Pipelines. In
    some circumstances, such as when ETP does not have a sufficient
    amount of lean gas on the Oasis and ET Fuel Pipelines to blend
    with the volume of rich gas that it receives at the
    La&#160;Grange and North Texas processing plants, ETP may have
    to process the rich gas. If ETP has to process when processing
    margins are unfavorable, its results of operations will be
    adversely affected.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP
    may be unable to retain existing customers or secure new
    customers, which would reduce its revenues and limit its future
    profitability.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The renewal or replacement of existing contracts with ETP&#146;s
    customers at rates sufficient to maintain current revenues and
    cash flows depends on a number of factors beyond its control,
    including competition from other pipelines, and the price of,
    and demand for, natural gas in the markets ETP serves.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For ETP&#146;s nine months ended May&#160;31, 2007,
    approximately 36% of its sales of natural gas were to industrial
    end-users and utilities. As a consequence of the increase in
    competition in the industry and volatility of natural gas
    prices, end-users and utilities are increasingly reluctant to
    enter into long-term purchase contracts. Many end-users purchase
    natural gas from more than one natural gas company and have the
    ability to change providers at any time. Some of these end-users
    also have the ability to switch between gas and alternate fuels
    in response to relative price fluctuations in the market.
    Because there are many companies of greatly varying size and
    financial capacity that compete with ETP in the marketing of
    natural gas, ETP often competes in the end-user markets and
    utilities markets primarily on the basis of price. The inability
    of ETP&#146;s management to renew or replace its current
    contracts as they expire and to respond appropriately to
    changing market conditions could have a negative effect on
    ETP&#146;s profitability.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP&#146;s
    storage business depends on neighboring pipelines to transport
    natural gas.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To obtain natural gas, ETP&#146;s storage business depends on
    the pipelines to which it has access. Many of these pipelines
    are owned by parties not affiliated with ETP. Any interruption
    of service on those pipelines or adverse change in their terms
    and conditions of service could have a material adverse effect
    on ETP&#146;s ability, and the ability of its customers, to
    transport natural gas to and from its facilities and a
    corresponding material adverse effect on ETP&#146;s storage
    revenues. In addition, the rates charged by those interconnected
    pipelines for transportation to and from ETP&#146;s facilities
    affect the utilization and value of its storage services.
    Significant changes in the rates charged by those pipelines or
    the rates charged by other pipelines with which the
    interconnected pipelines compete could also have a material
    adverse effect on ETP&#146;s storage revenues.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP&#146;s
    pipeline integrity program may cause it to incur significant
    costs and liabilities.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s operations are subject to regulation by the U.S.
    Department of Transportation, or DOT, under the Hazardous
    Liquids Pipeline Safety Act, or HLPSA, pursuant to which the DOT
    has established regulations relating to the design,
    installation, testing, construction, operation, replacement and
    management of pipeline facilities. Moreover, the DOT, through
    the Office of Pipeline Safety, has promulgated a rule requiring
    pipeline operators to develop integrity management programs to
    comprehensively evaluate their pipelines, and take measures to
    protect pipeline segments located in what the rule refers to as
    &#147;high consequence areas.&#148; Based on the results of
    ETP&#146;s current pipeline integrity testing programs, ETP
    estimates that compliance with these federal regulations and
    analogous state pipeline integrity requirements for its existing
    transportation assets other than Transwestern Pipeline will
    result in capital costs of $15.7&#160;million during the period
    between the remainder of calendar year 2007 through 2008, as
    well as operating and maintenance costs of $17.9&#160;million
    during that period. During this same time period, ETP estimates
    that it will incur pipeline integrity operating and maintenance
    costs of $8.5&#160;million with respect to its Transwestern
    Pipeline. Through May&#160;31, 2007, a total of
    $11.8&#160;million of capital costs and $12.0&#160;million of
    operating and maintenance costs have been incurred
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    26
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    for pipeline integrity testing. Integrity testing and assessment
    of all of these assets will continue, and the potential exists
    that results of such testing and assessment could cause ETP to
    incur even greater capital and operating expenditures for
    repairs or upgrades deemed necessary to ensure the continued
    safe and reliable operation of its pipelines.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Since
    weather conditions may adversely affect demand for propane,
    ETP&#146;s financial conditions may be vulnerable to warm
    winters.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Weather conditions have a significant impact on the demand for
    propane for heating purposes because the majority of ETP&#146;s
    customers rely heavily on propane as a heating fuel. Typically,
    ETP sells approximately two-thirds of its retail propane volume
    during the peak-heating season of October through March.
    ETP&#146;s results of operations can be adversely affected by
    warmer winter weather which results in lower sales volumes. In
    addition, to the extent that warm weather or other factors
    adversely affect ETP&#146;s operating and financial results, its
    access to capital and its acquisition activities may be limited.
    Variations in weather in one or more of the regions where ETP
    operates can significantly affect the total volume of propane
    that ETP sells and the profits realized on these sales.
    Agricultural demand for propane may also be affected by weather,
    including periods of unseasonably cold or hot periods or dry
    weather conditions which may impact agricultural operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">A
    natural disaster, catastrophe or other event could result in
    severe personal injury, property damage and environmental
    damage, which could curtail ETP&#146;s operations and otherwise
    materially adversely affect its cash flow and, accordingly,
    affect the market price of ETP&#146;s common
    units.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Some of ETP&#146;s operations involve risks of personal injury,
    property damage and environmental damage, which could curtail
    its operations and otherwise materially adversely affect its
    cash flow. For example, natural gas facilities operate at high
    pressures, sometimes in excess of 1,100 pounds per square inch.
    Virtually all of ETP&#146;s operations are exposed to potential
    natural disasters, including hurricanes, tornadoes, storms,
    floods
    <FONT style="white-space: nowrap">and/or</FONT>
    earthquakes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If one or more facilities that are owned by ETP or that deliver
    natural gas or other products to ETP are damaged by severe
    weather or any other disaster, accident, catastrophe or event,
    ETP&#146;s operations could be significantly interrupted.
    Similar interruptions could result from damage to production or
    other facilities that supply ETP&#146;s facilities or other
    stoppages arising from factors beyond its control. These
    interruptions might involve significant damage to people,
    property or the environment, and repairs might take from a week
    or less for a minor incident to six months or more for a major
    interruption. Any event that interrupts the revenues generated
    by ETP&#146;s operations, or which causes it to make significant
    expenditures not covered by insurance, could reduce ETP&#146;s
    cash available for paying distributions to its unitholders,
    including ETE and, accordingly, adversely affect the market
    price of ETP&#146;s common units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP believes that it maintains adequate insurance coverage,
    although insurance will not cover many types of interruptions
    that might occur. As a result of market conditions, premiums and
    deductibles for certain insurance policies can increase
    substantially, and in some instances, certain insurance may
    become unavailable or available only for reduced amounts of
    coverage. As a result, ETP may not be able to renew existing
    insurance policies or procure other desirable insurance on
    commercially reasonable terms, if at all. If ETP were to incur a
    significant liability for which it was not fully insured, it
    could have a material adverse effect on ETP&#146;s financial
    position and results of operations. In addition, the proceeds of
    any such insurance may not be paid in a timely manner and may be
    insufficient if such an event were to occur.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Terrorist
    attacks aimed at ETP&#146;s facilities could adversely affect
    its business, results of operations, cash flows and financial
    condition.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Since the September&#160;11, 2001 terrorist attacks on the
    United States, the United States government has issued warnings
    that energy assets, including the nation&#146;s pipeline
    infrastructure, may be the future target of terrorist
    organizations. These developments have subjected our operations
    to increased risks. Any terrorist
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    27
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    attack on ETP&#146;s facilities or pipelines or those of its
    customers could have a material adverse effect on ETP&#146;s
    business.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Sudden
    and sharp propane price increases that cannot be passed on to
    customers may adversely affect ETP&#146;s profit
    margins.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The propane industry is a &#147;margin-based&#148; business in
    which gross profits depend on the excess of sales prices over
    supply costs. As a result, ETP&#146;s profitability is sensitive
    to changes in energy prices, and in particular, changes in
    wholesale prices of propane. When there are sudden and sharp
    increases in the wholesale cost of propane, ETP may be unable to
    pass on these increases to its customers through retail or
    wholesale prices. Propane is a commodity and the price ETP pays
    for it can fluctuate significantly in response to changes in
    supply or other market conditions over which ETP has no control.
    In addition, the timing of cost pass-throughs can significantly
    affect margins. Sudden and extended wholesale price increases
    could reduce ETP&#146;s gross profits and could, if continued
    over an extended period of time, reduce demand by encouraging
    ETP&#146;s retail customers to conserve their propane usage or
    convert to alternative energy sources.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP&#146;s
    results of operations and its ability to make distributions or
    pay interest or principal on debt securities could be negatively
    impacted by price and inventory risk related to its propane
    business and management of these risks.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP generally attempts to minimize its cost and inventory risk
    related to its propane business by purchasing propane on a
    short-term basis under supply contracts that typically have a
    one-year term and at a cost that fluctuates based on the
    prevailing market prices at major delivery points. In order to
    help ensure adequate supply sources are available during periods
    of high demand, ETP may purchase large volumes of propane during
    periods of low demand or low price, which generally occur during
    the summer months, for storage in its facilities, at major third
    party storage facilities owned by third parties or for future
    delivery. This strategy may not be effective in limiting
    ETP&#146;s cost and inventory risks if, for example, market,
    weather or other conditions prevent or allocate the delivery of
    physical product during periods of peak demand. If the market
    price falls below the cost at which ETP made such purchases, it
    could adversely affect its profits.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Some of ETP&#146;s propane sales are pursuant to commitments at
    fixed prices. To mitigate the price risk related to ETP&#146;s
    anticipated sales volumes under the commitments, ETP may
    purchase and store physical product
    <FONT style="white-space: nowrap">and/or</FONT> enter
    into fixed price over-the-counter energy commodity forward
    contracts and options. Generally, over-the-counter energy
    commodity forward contracts have terms of less than one year.
    ETP enters into such contracts and exercises such options at
    volume levels that it believes are necessary to manage these
    commitments. The risk management of ETP&#146;s inventory and
    contracts for the future purchase of product could impair its
    profitability if customers do not fulfill their obligations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP also engages in other trading activities, and may enter into
    other types of over-the-counter energy commodity forward
    contracts and options. These trading activities are based on ETP
    management&#146;s estimates of future events and prices and are
    intended to generate a profit. However, if those estimates are
    incorrect or other market events outside of ETP&#146;s control
    occur, such activities could generate a loss in future periods
    and potentially impair its profitability.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP is
    dependent on its principal propane suppliers, which increases
    the risk of an interruption in supply.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During fiscal 2006, ETP purchased approximately 27% of its
    propane from Enterprise Products Operating L.P., approximately
    18% from Targa Liquids, and approximately 22% of its propane
    from M-P Energy Partnership, the Canadian partnership in which
    ETP owns a 60% interest. Titan purchases substantially all of
    its propane from Enterprise Products Operating L.P. pursuant to
    an agreement that expires in 2010. If supplies from these
    sources were interrupted, the cost of procuring replacement
    supplies and transporting those supplies from alternative
    locations might be materially higher and, at least on a
    short-term basis, margins could be adversely affected. Supply
    from Canada is subject to the additional risk of disruption
    associated with foreign trade such as trade restrictions,
    shipping delays and political, regulatory and economic
    instability.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    28
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Historically, a substantial portion of the propane that ETP
    purchases originated from one of the industry&#146;s major
    markets located in Mt. Belvieu, Texas and has been shipped to
    ETP through major common carrier pipelines. Any significant
    interruption in the service at Mt. Belvieu or other major market
    points, or on the common carrier pipelines ETP uses, would
    adversely affect its ability to obtain propane.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Competition
    from alternative energy sources may cause ETP to lose propane
    customers, thereby reducing its revenues.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Competition in ETP&#146;s propane business from alternative
    energy sources has been increasing as a result of reduced
    regulation of many utilities. Propane is generally not
    competitive with natural gas in areas where natural gas
    pipelines already exist because natural gas is a less expensive
    source of energy than propane. The gradual expansion of natural
    gas distribution systems and the availability of natural gas in
    many areas that previously depended upon propane could cause ETP
    to lose customers, thereby reducing its revenues. Fuel oil also
    competes with propane and is generally less expensive than
    propane. In addition, the successful development and increasing
    usage of alternative energy sources could adversely affect
    ETP&#146;s operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Energy
    efficiency and technological advances may affect the demand for
    propane and adversely affect ETP&#146;s operating
    results.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The national trend toward increased conservation and
    technological advances, including installation of improved
    insulation and the development of more efficient furnaces and
    other heating devices, has decreased the demand for propane by
    retail customers. Stricter conservation measures in the future
    or technological advances in heating, conservation, energy
    generation or other devices could adversely affect ETP&#146;s
    operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax Risks
    to Common Unitholders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to reading the following risk factors, you should
    read &#147;Material Tax Consequences&#148; for a more complete
    discussion of the expected material federal income tax
    consequences of owning and disposing of common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    tax treatment depends on our status as a partnership for federal
    income tax purposes, as well as our not being subject to a
    material amount of entity-level taxation by individual states.
    If the IRS were to treat us or ETP as a corporation or if we
    become subject to a material amount of entity-level taxation for
    state tax purposes, it would substantially reduce the amount of
    cash available for distribution to unitholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The anticipated after-tax economic benefit of an investment in
    our common units depends largely on our being treated as a
    partnership for federal income tax purposes. We have not
    requested, and do not plan to request, a ruling from the IRS on
    this or any other matter affecting us. The value of our
    investment in ETP depends largely on ETP being treated as a
    partnership for federal income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we were treated as a corporation for federal income tax
    purposes, we would pay federal income tax on our taxable income
    at the corporate tax rate, which is currently a maximum of 35%,
    and we would likely pay additional state income taxes as well.
    Distributions to unitholders would generally be taxed again as
    corporate distributions, and none of our income, gains, losses
    or deductions would flow through to unitholders. Because a tax
    would then be imposed upon us as a corporation, our cash
    available for distribution to unitholders would be substantially
    reduced. Therefore, treatment of us as a corporation would
    result in a material reduction in the anticipated cash flow and
    after-tax return to the unitholders, likely causing a
    substantial reduction in the value of our common units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If ETP were treated as a corporation for federal income tax
    purposes, it would pay federal income tax on its taxable income
    at the corporate tax rate. Distributions to us would generally
    be taxed again as corporate distributions, and no income, gains,
    losses, deduction or credits would flow through to us. As a
    result, there would be a material reduction in our anticipated
    cash flow, likely causing a substantial reduction in the value
    of our units.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    29
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Current law may change, causing us or ETP to be treated as a
    corporation for federal income tax purposes or otherwise
    subjecting us or ETP to entity-level taxation. For example,
    because of widespread state budget deficits and other reasons,
    several states are evaluating ways to subject partnerships to
    entity-level taxation through the imposition of state income,
    franchise or other forms of taxation. If any state were to
    impose a tax upon us or ETP as an entity, the cash available for
    distribution to our unitholders would be reduced.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    tax treatment of our structure is subject to potential
    legislative, judicial or administrative changes and differing
    interpretations, possibly on a retroactive basis.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The U.S.&#160;federal income tax treatment of common unitholders
    depends in some instances on determinations of fact and
    interpretations of complex provisions of U.S.&#160;federal
    income tax law. You should be aware that the U.S.&#160;federal
    income tax rules are constantly under review by persons involved
    in the legislative process, the IRS, and the U.S.&#160;Treasury
    Department, frequently resulting in revised interpretations of
    established concepts, statutory changes, revisions to Treasury
    Regulations and other modifications and interpretations. The
    present U.S.&#160;federal income tax treatment of an investment
    in our common units may be modified by administrative,
    legislative or judicial interpretation at any time. Any
    modification to the U.S.&#160;federal income tax laws and
    interpretations thereof may or may not be applied retroactively
    and could make it more difficult or impossible to meet the
    exception for us to be treated as a partnership for
    U.S.&#160;federal income tax purposes that is not taxable as a
    corporation (referred to as the &#147;Qualifying Income
    Exception&#148;), affect or cause us to change our business
    activities, affect the tax considerations of an investment in
    us, change the character or treatment of portions of our income
    and adversely affect an investment in our common units. For
    example, in response to certain recent developments, members of
    Congress are considering substantive changes to the definition
    of qualifying income under Internal Revenue Code
    section&#160;7704(d). It is possible that these efforts could
    result in changes to the existing U.S.&#160;federal tax laws
    that affect publicly traded partnerships, including us. We are
    unable to predict whether any of these changes or other
    proposals will ultimately be enacted. Any such changes could
    negatively impact the value of an investment in our common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    prorate our items of income, gain, loss and deduction between
    transferors and transferees of our units each month based upon
    the ownership of our units on the first day of each month,
    instead of on the basis of the date a particular unit is
    transferred. The IRS may challenge this treatment, which could
    change the allocation of items of income, gain, loss and
    deduction among our unitholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We prorate our items of income, gain, loss and deduction between
    transferors and transferees of our units each month based upon
    the ownership of our units on the first day of each month,
    instead of on the basis of the date a particular unit is
    transferred. The use of this proration method may not be
    permitted under existing Treasury regulations, and, accordingly,
    Vinson&#160;&#038; Elkins L.L.P. is unable to opine as to the
    validity of this method. If the IRS were to challenge this
    method or new Treasury regulations were issued, we may be
    required to change the allocation of items of income, gain, loss
    and deduction among our unitholders. Please read &#147;Material
    Tax Consequences&#160;&#151; Disposition of Common
    Units&#160;&#151; Allocations Between Transferors and
    Transferees.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If the
    IRS contests the federal income tax positions we or ETP takes,
    the market for our common units or ETP common units may be
    adversely affected, and the costs of any such contest will
    reduce cash available for distributions to our
    unitholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The IRS may adopt positions that differ from the conclusions of
    our counsel expressed in this prospectus or from the positions
    we or ETP take. It may be necessary to resort to administrative
    or court proceedings to sustain some or all of our
    counsel&#146;s conclusions or the positions we or ETP take. A
    court may not agree with some or all of our counsel&#146;s
    conclusions or the positions we or ETP take. Any contest with
    the IRS may materially and adversely impact the market for our
    common units or ETP&#146;s common units and the prices at which
    they trade. In addition, the costs of any contest with the IRS
    will be borne by us or ETP, and therefore indirectly by us, as a
    unitholder and as the owner of the general partner of ETP,
    reducing the cash available for distribution to our unitholders.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    30
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Unitholders
    may be required to pay taxes on their share of our income even
    if they do not receive any cash distributions from
    us.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because our unitholders will be treated as partners to whom we
    will allocate taxable income which could be different in amount
    than the cash we distribute, unitholders will be required to pay
    any federal income taxes and, in some cases, state and local
    income taxes on your share of our taxable income even if they
    receive no cash distributions from us. Unitholders may not
    receive cash distributions from us equal to their share of our
    taxable income or even equal to the actual tax liability that
    results from the taxation of their share of our taxable income.
    In such case, unitholders would still be required to pay federal
    income taxes and, in some cases, state and local income taxes on
    their share of our taxable income regardless of the amount, if
    any, of any cash distributions they receive from us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Tax
    gain or loss on disposition of our common units could be more or
    less than expected.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If unitholders sell their common units, they will recognize a
    gain or loss equal to the difference between the amount realized
    and the tax basis in those common units. Because distributions
    in excess of the unitholder&#146;s allocable share of our net
    taxable income decrease the unitholder&#146;s tax basis in their
    common units, the amount, if any, of such prior excess
    distributions with respect to the units sold will, in effect,
    become taxable income to the unitholder if they sell such units
    at a price greater than their tax basis in those units, even if
    the price received is less than their original cost.
    Furthermore, a substantial portion of the amount realized,
    whether or not representing gain, may be taxed as ordinary
    income due to potential recapture items, including depreciation
    recapture. In addition, because the amount realized includes a
    unitholder&#146;s share of our nonrecourse liabilities, if a
    unitholder sells units, the unitholder may incur a tax liability
    in excess of the amount of cash received from the sale. Please
    read &#147;Material Tax Consequences&#160;&#151; Disposition of
    Common Units&#160;&#151; Recognition of Gain or Loss&#148; for a
    further discussion of the foregoing.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Tax-exempt
    entities and foreign persons face unique tax issues from owning
    common units that may result in adverse tax consequences to
    them.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Investment in common units by tax-exempt entities, including
    employee benefit plans and individual retirement accounts (known
    as IRAs) and
    <FONT style="white-space: nowrap">non-U.S.&#160;persons</FONT>
    raises issues unique to them. For example, virtually all of our
    income allocated to unitholders who are organizations exempt
    from federal income tax, may be taxable to them as
    &#147;unrelated business taxable income.&#148; Distributions to
    <FONT style="white-space: nowrap">non-U.S.&#160;persons</FONT>
    will be reduced by withholding taxes, at the highest applicable
    effective tax rate, and
    <FONT style="white-space: nowrap">non-U.S.&#160;persons</FONT>
    will be required to file federal income tax returns and
    generally pay tax on their share of our taxable income. If you
    are a tax-exempt entity or a
    <FONT style="white-space: nowrap">non-U.S.&#160;person,</FONT>
    you should consult your tax advisor before investing in our
    common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    treat each purchaser of common units as having the same tax
    benefits without regard to the actual common units purchased.
    The IRS may challenge this treatment, which could result in a
    Unitholder owing more tax and may adversely affect the value of
    the common units.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To maintain the uniformity of the economic and tax
    characteristics of our common units, we have adopted certain
    depreciation and amortization positions that are inconsistent
    with existing Treasury Regulations. These positions may result
    in an understatement of deductions and losses and an
    overstatement of income and gain to our unitholders. For
    example, we do not amortize certain goodwill assets, the value
    of which has been attributed to certain of our outstanding
    units. A subsequent holder of those units is entitled to an
    amortization deduction attributable to that goodwill under
    Internal Revenue Code Section&#160;743(b). But, because we
    cannot identify these units once they are traded by the initial
    holder, we do not give any subsequent holder of a unit any such
    amortization deduction. This approach understates deductions
    available to those Unitholders who own those units and may
    result in those unitholders believing that they have a higher
    tax basis in their units than is actually the case. This, in
    turn, may result in those unitholders reporting less gain or
    more loss on a sale of their units than is actually the case.
</DIV>

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    <BR>
    31
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The IRS may challenge the manner in which we calculate our
    unitholder&#146;s basis adjustment under Section&#160;743(b). If
    so, because neither we nor a unitholder can identify the units
    to which this issue relates once the initial holder has traded
    them, the IRS may assert adjustments to all unitholders selling
    units within the period under audit as if all unitholders owned
    such units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any position we take that is inconsistent with applicable
    Treasury Regulations may have to be disclosed on our federal
    income tax return. This disclosure increases the likelihood that
    the IRS will challenge our positions and propose adjustments to
    some or all of our unitholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A successful IRS challenge to this position or other positions
    we may take could adversely affect the amount of taxable income
    or loss allocated to our unitholders. It also could affect the
    gain from a unitholder&#146;s sale of common units and could
    have a negative impact on the value of the common units or
    result in audit adjustments to our unitholders&#146; tax returns
    without the benefit of additional deductions. Moreover, because
    one of our subsidiaries that is organized as a C corporation for
    federal income tax purposes owns units in us, a successful IRS
    challenge could result in this subsidiary having more tax
    liability than we anticipate and, therefore, reduce the cash
    available for distribution to our partnership and, in turn, to
    you.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP
    has adopted certain valuation methodologies that may result in a
    shift of income, gain, loss and deduction between us and the
    public unitholders of ETP. The IRS may challenge this treatment,
    which could adversely affect the value of ETP&#146;s common
    units and our common units.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    When we or ETP issue additional units or engage in certain other
    transactions, ETP determines the fair market value of its assets
    and allocates any unrealized gain or loss attributable to such
    assets to the capital accounts of ETP&#146;s unitholders and us.
    Although ETP may from time to time consult with professional
    appraisers regarding valuation matters, including the valuation
    of its assets, ETP makes many of the fair market value estimates
    of its assets itself using a methodology based on the market
    value of its common units as a means to measure the fair market
    value of its assets. ETP&#146;s methodology may be viewed as
    understating the value of ETP&#146;s assets. In that case, there
    may be a shift of income, gain, loss and deduction between
    certain ETP unitholders and us, which may be unfavorable to such
    ETP unitholders. Moreover, under our current valuation methods,
    subsequent purchasers of our common units may have a greater
    portion of their Internal Revenue Code Section&#160;743(b)
    adjustment allocated to ETP&#146;s tangible assets and a lesser
    portion allocated to ETP&#146;s intangible assets. The IRS may
    challenge ETP&#146;s valuation methods, or our or ETP&#146;s
    allocation of Section&#160;743(b) adjustment attributable to
    ETP&#146;s tangible and intangible assets, and allocations of
    income, gain, loss and deduction between us and certain of
    ETP&#146;s unitholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A successful IRS challenge to these methods or allocations could
    adversely affect the amount of taxable income or loss being
    allocated to our unitholders or the ETP unitholders. It also
    could affect the amount of gain on the sale of common units by
    our unitholders or ETP&#146;s unitholders and could have a
    negative impact on the value of our common units or those of ETP
    or result in audit adjustments to the tax returns of our or
    ETP&#146;s unitholders without the benefit of additional
    deductions.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    sale or exchange of 50% or more of our capital and profits
    interests during any twelve month period will result in the
    termination of our partnership for federal income tax
    purposes.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership will be considered to have terminated for
    federal income tax purposes if transfers of units within a
    twelve month period constitute the sale or exchange of 50% or
    more of our capital and profit interests. In order to determine
    whether a sale or exchange of 50% or more of capital and profits
    interests has occurred, we review information available to us
    regarding transactions involving transfers of our units,
    including reported transfers of units by our affiliates and
    sales of units pursuant to trading activity in the public
    markets; however, the information we are able to obtain is
    generally not sufficient to make a definitive determination, on
    a current basis, of whether there have been sales and exchanges
    of 50% or more of our capital and profits interests within the
    prior twelve&#160;month period, and we may not have all of the
    information necessary to make this determination until several
    months following the time of the transfers that would cause the
    50% threshold to be exceeded.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    32
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Based on the information currently available to us, we believe
    and intend to take the position that the sale of our common
    units by Ray C. Davis and Natural Gas Partners VI, L.P. to
    Enterprise GP Holdings, L.P. on May&#160;7, 2007, together with
    all other common units sold within the prior twelve months,
    represented a sale or exchange of 50% or more of the total
    interest in our capital and profits interests and resulted in
    our termination and immediate reconstitution as a new
    partnership for federal income tax purposes. Moreover, our
    termination resulted in a deemed transfer of all of our
    interests in ETP, causing a termination of ETP&#146;s
    partnership for federal income tax purposes. These terminations
    do not affect our classification or the classification of ETP as
    a partnership for federal income tax purposes or otherwise
    affect the nature or extent of our &#147;qualifying income&#148;
    or the &#147;qualifying income&#148; of ETP for federal income
    tax purposes. The closing of our taxable years will result in us
    and ETP both filing two tax returns (and unitholders receiving
    two
    <FONT style="white-space: nowrap">Schedule&#160;K-1&#146;s)</FONT>
    for one fiscal year. Moreover, these terminations will require
    both us and ETP to close our taxable years and to make new
    elections as to various tax matters. In addition, ETP will be
    required to reset the depreciation schedule for its depreciable
    assets for federal income tax purposes. The resetting of
    ETP&#146;s depreciation schedule will result in a deferral of
    the depreciation deductions allowable in computing the taxable
    income allocated to the unitholders of ETP (including Heritage
    Holdings as the holder of our Class&#160;E units) and,
    consequently, to our unitholders. However, elections ETP and ETE
    will make with respect to the amortization of certain intangible
    assets should have the effect of reducing the amount of taxable
    income that would otherwise be allocated to ETE unitholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that the net effect of our tax termination and the
    tax termination of ETP will be an allocation for the 2007
    calendar year of (i)&#160;an increased amount of taxable income
    as a percentage of the cash distributed to our unitholders who
    acquired their units prior to our initial public offering in
    February&#160;2006 and (ii)&#160;a decrease in the amount of
    taxable income as a percentage of the cash distributed to our
    unitholders who purchased their units on or after the date of
    our initial public offering in February 2006. We estimate, based
    on our current distribution levels and various assumptions
    regarding the gross income and capital expenditures of ETP, that
    a unitholder who purchased our units on the date of our initial
    public offering or a new purchaser of our units would be
    allocated taxable income of less than 10% of the cash
    distributed to them for the 2008 calendar year. In the case of a
    unitholder reporting on a taxable year other than a fiscal year
    ending December&#160;31, the closing of our taxable year may
    result in more than twelve&#160;months of our income or loss
    being includable in their taxable income for the year of
    termination.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>You will likely be subject to state and local taxes and
    return filing requirements in states where you do not live as a
    result of investing in our common units.</I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to federal income taxes, the unitholders may be
    subject to other taxes, including state and local taxes,
    unincorporated business taxes and estate, inheritance or
    intangible taxes that are imposed by the various jurisdictions
    in which we or ETP do business or own property now or in the
    future, even if they do not live in any of those jurisdictions.
    Unitholders may be required to file state and local income tax
    returns and pay state and local income taxes in some or all of
    the jurisdictions. Further, unitholders may be subject to
    penalties for failure to comply with those requirements. It is
    the responsibility of each unitholder to file all federal, state
    and local tax returns. Our counsel has not rendered an opinion
    on the state or local tax consequences of an investment in us.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    33
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "USE OF PROCEEDS" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='106'></A><B><FONT style="font-family: 'Times New Roman', Times">USE
    OF PROCEEDS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless otherwise indicated to the contrary in an accompanying
    prospectus supplement, we will use the net proceeds from the
    sale of securities covered by this prospectus for general
    partnership purposes, which may include repayment of
    indebtedness and other capital expenditures and additions to
    working capital.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any specific allocation of the net proceeds of an offering of
    securities to a specific purpose will be determined at the time
    of the offering and will be described in a prospectus supplement.
</DIV>

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    <BR>
    34
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "DESCRIPTION OF OUR COMMON UNITS" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='107'></A><B><FONT style="font-family: 'Times New Roman', Times">DESCRIPTION
    OF OUR COMMON UNITS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Generally, our common units represent limited partner interests
    that entitle the holders to participate in our cash
    distributions and to exercise the rights and privileges
    available to limited partners under our partnership agreement.
    For a description of the relative rights and preferences of
    holders of common units and our general partner in and to cash
    distributions, please read &#147;Our Cash Distribution
    Policy.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our outstanding common units trade on the NYSE under the symbol
    &#147;ETE.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transfer
    Agent and Registrar</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    American Stock Transfer&#160;&#038; Trust&#160;Company serves as
    our registrar and transfer agent for our common units. We pay
    all fees charged by the transfer agent for transfers of units,
    except the following that must be paid by unitholders:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    surety bond premiums to replace lost or stolen certificates,
    taxes and other governmental charges;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    special charges for services requested by a holder of a common
    unit;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    other similar fees or charges.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There is no charge to unitholders for disbursements of our cash
    distributions. We will indemnify the transfer agent, its agents
    and each of their stockholders, directors, officers and
    employees against all claims and losses that may arise out of
    acts performed or omitted for its activities in that capacity,
    except for any liability due to any gross negligence or
    intentional misconduct of the indemnified person or entity.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The transfer agent may resign, by notice to us, or be removed by
    us. The resignation or removal of the transfer agent will become
    effective upon our appointment of a successor transfer agent and
    registrar and its acceptance of the appointment. If no successor
    has been appointed and has accepted the appointment within
    30&#160;days after notice of the resignation or removal, our
    general partner may act as the transfer agent and registrar
    until a successor is appointed.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transfer
    of Common Units</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    By transfer of our common units in accordance with our
    partnership agreement, each transferee of our common units will
    be admitted as a unitholder with respect to the common units
    transferred when such transfer and admission is reflected in our
    books and records except in the circumstances described below.
    Additionally, each transferee of our common units:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    represents that the transferee has the capacity, power and
    authority to become bound by our partnership agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    automatically agrees to be bound by the terms and conditions of,
    and is deemed to have executed, our partnership
    agreement;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    gives the consents and approvals contained in our partnership
    agreement, such as the approval of all transactions and
    agreements that we are entering into in connection with our
    formation and this offering.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An assignee will become a substituted limited partner of our
    partnership for the transferred common units automatically upon
    the recording of the transfer on our books and records except in
    the circumstances described below. The general partner will
    cause any transfers to be recorded on our books and records no
    less frequently than quarterly. Although our general partner is
    not prevented from withholding its consent to an assignee
    requesting admission as a substituted limited partner, we do not
    anticipate that our general partner will exercise this right.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may, at our discretion, treat the nominee holder of a common
    unit as the absolute owner. In that case, the beneficial
    holder&#146;s rights are limited solely to those that it has
    against the nominee holder as a result of any agreement between
    the beneficial owner and the nominee holder.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    35
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Common units are securities and are transferable according to
    the laws governing transfers of securities. In addition to other
    rights acquired upon transfer, the transferor gives the
    transferee the right to become a substituted limited partner in
    our partnership for the transferred common units except in the
    circumstances described below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Until a common unit has been transferred on our books, we and
    the transfer agent, notwithstanding any notice to the contrary,
    may treat the record holder of the common unit as the absolute
    owner for all purposes, except as otherwise required by law or
    stock exchange regulations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We own an interstate pipeline that is subject to rate regulation
    of the Federal Energy Regulatory Commission, or FERC, and as a
    result our general partner has the right under our partnership
    agreement to institute procedures, by giving notice to each of
    our unitholders, that would require transferees of common units
    and, upon the request of our general partner, existing holders
    of our common units to certify that they are Eligible Holders.
    The purpose of these certification procedures would be to enable
    us to utilize a federal income tax expense as a component of the
    pipeline&#146;s rate base upon which tariffs may be established
    under FERC rate making policies applicable to entities that
    pass-through their taxable income to their owners. Eligible
    Holders are individuals or entities subject to United States
    federal income taxation on the income generated by us or
    entities not subject to United States federal income taxation on
    the income generated by us, so long as all of the entity&#146;s
    owners are subject to such taxation. If these tax certification
    procedures are implemented, transferees of common units will be
    required to fill out a properly completed transfer application
    certifying, and our general partner, acting on our behalf, may
    at any time require each unitholder to re-certify;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    that the transferee or unitholder is an individual or an entity
    subject to United States federal income taxation on the income
    generated by us;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    that, if the transferee unitholder is an entity not subject to
    United States federal income taxation on the income generated by
    us, as in the case, for example, of a mutual fund taxed as a
    regulated investment company or a partnership, all the
    entity&#146;s owners are subject to United States federal income
    taxation on the income generated by us.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event that this notice is given by our general partner,
    which we refer to as a &#147;FERC Notice,&#148; transfers of a
    common unit will not be recorded by the transfer agent or
    recognized by us unless the transferee executes and delivers a
    properly completed transfer application. By executing and
    delivering a transfer application, the transferee of common
    units:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    becomes the record holder of the common units and is an assignee
    until admitted into our partnership as a substituted limited
    partner;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    automatically requests admission as a substituted limited
    partner in our partnership;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    executes and agrees to be bound by the terms and conditions of
    our partnership agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    represent that the transferee has the capacity, power and
    authority to enter into our partnership agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    grants powers of attorney to the officers of our general partner
    and any liquidator of us as specified in our partnership
    agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    gives the consents, covenants, representations and approvals
    contained in our partnership agreement;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    certifies:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    that the transferee is an individual or is an entity subject to
    United States federal income taxation on the income generated by
    us;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    that, if the transferee is an entity not subject to United
    States federal income taxation on the income generated by us, as
    in the case, for example, of a mutual fund taxed as a regulated
    investment company or a partnership, all the entity&#146;s
    owners are subject to United States federal income taxation on
    the income generated by us.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    36
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following a FERC Notice, an assignee will become a substituted
    limited partner of our partnership for the transferred common
    units automatically upon the recording of the transfer on our
    books and records. Our general partner will cause any unrecorded
    transfers for which a properly completed and duly executed
    transfer application has been received to be recorded on our
    books and records no less frequently than quarterly.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following a FERC Notice, a transferee&#146;s broker, agent or
    nominee may, but is not obligated to, complete, execute and
    deliver a transfer application. We are entitled to treat the
    nominee holder of a common unit as the absolute owner. In that
    case, the beneficial holder&#146;s rights are limited solely to
    those that it has against the nominee holder as a result of any
    agreement between the beneficial owner and the nominee holder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following a FERC Notice, in addition to other rights acquired
    upon transfer, the transferor gives the transferee the right to
    request admission as a substituted limited partner in our
    partnership for the transferred common units. A purchaser or
    transferee of common units who does not execute and deliver a
    properly completed transfer application obtains only:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the right to assign the common unit to a purchaser or other
    transferee;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the right to transfer the right to seek admission as a
    substituted limited partner in our partnership for the
    transferred common units.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result, following a FERC Notice, a purchaser or transferee
    of common units who does not execute and deliver a properly
    completed transfer application:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    will not receive cash distributions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    will not be allocated any of our income, gain, deduction, losses
    or credits for federal income tax or other tax purposes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    may not receive some federal income tax information or reports
    furnished to record holders of common units;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    will have no voting rights;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    unless the common units are held in a nominee or &#147;street
    name&#148; account and the nominee or broker has executed and
    delivered a transfer application and certification as to itself
    and any beneficial holders.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The transferor of common units has a duty to provide the
    transferee with all information that may be necessary to
    transfer the common units. The transferor does not have a duty
    to ensure that the execution of the transfer application by the
    transferee and has no liability or responsibility if the
    transferee neglects or chooses not to execute and deliver a
    properly completed transfer application to the transfer agent.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Class B
    Units</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On March&#160;27, 2007, all of the outstanding Class&#160;B
    units were converted into common units and, as a result, there
    are no longer any outstanding Class&#160;B units.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    37
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Comparison
    of Rights of Holders of Our Common Units and ETP&#146;s Common
    Units</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table compares certain features of ETP&#146;s
    common units and our common units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="33%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="31%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="31%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>ETP&#146;s Common Units</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Our Common Units</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Taxation of Entity and Entity Owners
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    ETP is a flow-through entity that is not subject to an
    entity-level federal income tax.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Similarly, we are a flow-through entity that is not subject to
    an entity-level federal income tax.<BR>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 10pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    ETP common unitholders generally will be allocated an amount of
    federal taxable income for the cumulative period ending December
    31, 2008 related to ETP&#146;s operations that is expected to be
    less than the cumulative amount of cash distributions that they
    receive with respect to that period.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Similarly, our common unitholders will be allocated an amount of
    federal taxable income for the cumulative period ending December
    31, 2008 related to our operations that is expected to be less
    than the amount of cash distributions that they receive with
    respect to that period, although the ratio of taxable income
    allocated to our unitholders in relation to our cash
    distributions will be greater than the ratio of taxable income
    allocated to ETP&#146;s unitholders in relation to its cash
    distributions.<BR>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 10pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    ETP common unitholders will receive Schedule K-1s from ETP
    reflecting the unitholders&#146; share of ETP&#146;s items of
    income, gain, loss and deduction at the end of each calendar
    year.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Our common unitholders also will receive Schedule K-1s from us
    reflecting the unitholders&#146; share of our items of income,
    gain, loss and deduction at the end of each calendar year.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 20pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Sources of Cash Flow
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    ETP is our subsidiary and may engage in acquisition and
    development activities that expand its business and operations.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Our cash-generating assets consist of our partnership interests
    in ETP, including incentive distribution rights, and we
    currently have no independent operations. Accordingly, our
    financial performance and our ability to pay cash distributions
    to our unitholders is currently directly dependent upon the
    performance of ETP. In the future, if we elect to develop
    independent operations, we may own assets or engage in
    businesses that compete directly or indirectly with ETP, except
    that ETP&#146;s partnership agreement prohibits us from engaging
    in the retail propane business in the United States.<BR>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 10pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Limitation on Issuance of Additional Units
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    ETP may issue an unlimited number of additional partnership
    interests and other equity securities without obtaining
    unitholder approval.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Similarly, we may issue an unlimited number of additional
    partnership interests and other equity securities without
    obtaining unitholder approval.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP also has outstanding class&#160;E units, none of which are
    publicly traded. Please read &#147;Material Provisions of
    ETP&#146;s Partnership Agreement&#160;&#151; ETP Units&#148; for
    a discussion of other classes of ETP units.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    38
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "OUR CASH DISTRIBUTION POLICY" -->


<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='108'></A><B><FONT style="font-family: 'Times New Roman', Times">OUR
    CASH DISTRIBUTION POLICY</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Set forth below is a summary of our cash distribution, including
    a description of the significant provisions of our partnership
    agreement that relate to cash distributions as well as a
    description of restrictions on our ability to make cash
    distributions.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">General</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement requires that, within 50&#160;days
    after the end of each quarter, we distribute all of our
    available cash to the holders of record or our common units on
    the applicable record date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Available cash is defined in our partnership agreement and
    generally means, with respect to any calendar quarter, all cash
    on hand at the end of such quarter:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    less the amount of cash reserves necessary or appropriate, as
    determined in good faith by our general partner, to:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    satisfy general, administrative and other expenses and debt
    service requirements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    permit Energy Transfer Partners GP to make capital contributions
    to ETP in order to maintain its 2% general partner interest as
    required by ETP&#146;s partnership agreement upon the issuance
    of additional partnership securities by ETP;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    comply with applicable law or any debt instrument or other
    agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provide funds for distributions to unitholders and our general
    partner in respect of any one or more of the next four
    quarters;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    otherwise provide for the proper conduct of our business;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    plus all cash on hand immediately prior to the date of the
    distribution of available cash for the quarter.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Rationale for our Cash Distribution
    Policy.</I>&#160;&#160;Our cash distribution policy reflects a
    basic judgment that our unitholders will be better served by our
    distributing our available cash rather than retaining it. It is
    important that you understand that our only cash-generating
    assets currently consist of partnership interests, including
    incentive distribution rights, in ETP from which we receive
    quarterly distributions. We currently have no independent
    operations outside of our interests in ETP. Because we believe
    we will have relatively low cash requirements for operating
    expenses and that we will finance any material capital
    investments from external financing sources, we believe that our
    investors are best served by distributing all of our available
    cash as described below. Because we are not subject to an
    entry-level federal income tax, we expect to have more cash to
    distribute to you than would be the case were we subject to tax.
    Our distribution policy is consistent with the terms of our
    partnership agreement, which requires that we distribute all of
    our available cash quarterly.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Restrictions and Limitations on our Ability to Change our
    Cash Distribution Policy</I>.&#160;&#160;There is no guarantee
    that unitholders will receive quarterly distributions from us.
    Our distribution policy is subject to certain restrictions and
    may be changed at any time. These restrictions include the
    following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our distribution policy is subject to restrictions on
    distributions under our credit facilities. Specifically, our
    credit facilities contain material financial tests and covenants
    that we will be required to satisfy. Should we be unable to
    comply with the restrictions under our credit facilities, we
    would be prohibited from making cash distributions to you
    notwithstanding our stated distribution policy.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    ETP&#146;s distribution policy is subject to restrictions on
    distributions under its credit agreements. Specifically,
    ETP&#146;s credit agreements contain material financial tests
    and covenants that it must satisfy. Should ETP be unable to
    comply with the restrictions under its credit agreements, ETP
    would be prohibited from making cash distributions to us, which
    in turn would prevent us from making cash distributions to you
    notwithstanding our stated distribution policy. In addition, ETP
    would enter into new credit agreements containing financial
    tests and covenants that are more difficult to satisfy than
    those described in this prospectus.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    39
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The board of directors of our general partner has the authority
    under our partnership agreement to establish reserves for the
    prudent conduct of our business and for future cash
    distributions to our unitholders, and the establishment of those
    reserves could result in a reduction in cash distributions to
    you from levels we currently anticipate pursuant to our stated
    distribution policy.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The board of directors of ETP&#146;s general partner has the
    authority under ETP&#146;s partnership agreement to establish
    reserves for the prudent conduct of ETP&#146;s business and for
    future cash distributions to ETP&#146;s unitholders, and the
    establishment of those reserves could result in a reduction in
    cash distributions that we would otherwise anticipate receiving
    from ETP, which in turn could result in a reduction in cash
    distributions to you from levels we currently anticipate
    pursuant to our stated distribution policy.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    While our partnership agreement requires us to distribute all of
    our available cash, our partnership agreement, including our
    cash distribution policy contained therein, may be amended by a
    vote of the holders of a majority of our common units. As of
    May&#160;31, 2007, our affiliates, excluding Enterprise GP
    Holdings L.P., own approximately 37.4% of our outstanding common
    units.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Even if our cash distribution policy is not modified or revoked,
    the amount of distributions paid under our cash distribution
    policy is subject to the determination of our general partner,
    taking into consideration the terms of our partnership agreement.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The amount of distributions paid under ETP&#146;s cash
    distribution policy is subject to the determination of
    ETP&#146;s general partner, taking into consideration the terms
    of its partnership agreement.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Under
    <FONT style="white-space: nowrap">Section&#160;17-607</FONT>
    of the Delaware Revised Uniform Limited Partnership Act, we may
    not make a distribution to you if the distribution would cause
    our liabilities to exceed the fair value of our assets.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We may lack sufficient cash to pay distributions to our
    unitholders due to increases in general and administrative
    expenses, principal and interest payments on our outstanding
    debt, tax expenses, working capital requirements and anticipated
    cash needs of us or ETP and its subsidiaries.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Our Cash Distribution Policy Limits Our Ability to
    Grow.</I>&#160;&#160;As with most other master limited
    partnerships, because we distribute all of our available cash,
    our growth may not be as fast as businesses that reinvest their
    available cash to expand ongoing operations. In fact, since our
    only cash-generating assets currently consist of our partnership
    interests in ETP, including incentive distribution rights, our
    growth initially will be dependent upon ETP&#146;s ability to
    increase its quarterly distribution per unit. If we issue
    additional units or incur debt to fund acquisitions and growth
    capital expenditures, the payment of distributions on those
    additional units or interest on that debt could increase the
    risk that we will be unable to maintain or increase our per unit
    distribution level.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>ETP&#146;s Ability to Grow is Dependent on its Ability to
    Access External Growth Capital</I>.&#160;&#160;Consistent with
    the terms of its partnership agreement, ETP has distributed to
    its partners most of the cash generated by its operations. As a
    result, it has relied upon external financing sources, including
    commercial borrowings and other debt and equity issuances, to
    fund its acquisition and growth capital expenditures.
    Accordingly, to the extent ETP is unable to finance growth
    externally, its cash distribution policy will significantly
    impair its ability to grow. In addition, to the extent ETP
    issues additional units in connection with any acquisitions or
    growth capital expenditures, the payment of distributions on
    those additional units may increase the risk that ETP will be
    unable to maintain or increase its per unit distribution level,
    which in turn may impact the available cash that we have to
    distribute to our unitholders. The incurrence of additional
    commercial or other debt to finance its growth strategy would
    result in increased interest expense to ETP, which in turn may
    impact the available cash that we have to distribute to our
    unitholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">General
    Partner Interest</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the date of this prospectus, our general partner is
    entitled to approximately 0.5% of all distributions that we make
    prior to our liquidation. This general partner interest is
    represented by 692,065 general partner units. The general
    partner&#146;s initial 0.5% interest in these distributions will
    be proportionately reduced if we issue additional units in the
    future and our general partner does not contribute a
    proportionate amount of
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    40
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    capital to us to maintain its 0.5% general partner interest. Our
    general partner has the right, but not the obligation, to
    contribute a proportionate amount of capital to us to maintain
    its current general partner interest.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Adjustments
    to Capital Accounts</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will make adjustments to capital accounts upon the issuance
    of additional units. In doing so, we will allocate any
    unrealized and, for tax purposes, unrecognized gain or loss
    resulting from the adjustments to the unitholders and the
    general partner in the same manner as we allocate gain or loss
    upon liquidation. In the event that we make positive adjustments
    to the capital accounts upon the issuance of additional units,
    we will allocate any later negative adjustments to the capital
    accounts resulting from the issuance of additional units or upon
    our liquidation in a manner which results, to the extent
    possible, in the general partner&#146;s capital account balances
    equaling the amount which they would have been if no earlier
    positive adjustments to the capital accounts had been made.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions
    of Cash upon Liquidation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we dissolve in accordance with the partnership agreement, we
    will sell or otherwise dispose of our assets in a process called
    a liquidation. We will first apply the proceeds of liquidation
    to the payment of our creditors in the order of priority
    provided in the partnership agreement and by law and,
    thereafter, we will distribute any remaining proceeds to the
    unitholders and our general partner in accordance with their
    respective capital account balances, as adjusted to reflect any
    gain or loss upon the sale or other disposition of our assets in
    liquidation.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    41
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "ETP&#146;S CASH DISTRIBUTION POLICY" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='109'></A><B><FONT style="font-family: 'Times New Roman', Times">ETP&#146;S
    CASH DISTRIBUTION POLICY</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following is a description of the relative rights and
    preferences of holders of ETP&#146;s common units and ETP&#146;s
    general partner in and to cash distributions.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions
    of Available Cash</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>General.</I>&#160;&#160;ETP distributes all of its
    &#147;available cash&#148; to its unitholders and its general
    partner within 45&#160;days following the end of each fiscal
    quarter.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Definition of Available Cash.</I>&#160;&#160;Available cash
    of ETP is defined in ETP&#146;s partnership agreement and
    generally means, with respect to any calendar quarter, all cash
    on hand at the end of such quarter:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    less the amount of cash reserves that are necessary or
    appropriate in the reasonable discretion of the general partner
    of ETP to:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provide for the proper conduct of its business;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    comply with applicable law or any debt instrument or other
    agreement (including reserves for future capital expenditures
    and for its future credit needs);&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provide funds for distributions to ETP&#146;s unitholders and
    its general partner in respect of any one or more of the next
    four quarters;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    plus all of ETP&#146;s cash on hand on the date of determination
    of available cash for the quarter resulting from working capital
    borrowings of ETP made after the end of the quarter. Working
    capital borrowings are generally borrowings that are made under
    ETP&#146;s credit facilities and in all cases are used solely
    for working capital purposes or to pay distributions to
    ETP&#146;s partners.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Operating
    Surplus and Capital Surplus</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>General.</I>&#160;&#160;All cash distributed to ETP&#146;s
    unitholders is characterized as either &#147;operating
    surplus&#148; or &#147;capital surplus.&#148; ETP distributes
    available cash from operating surplus differently than its
    available cash from capital surplus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Definition of Operating Surplus.</I>&#160;&#160;ETP&#146;s
    operating surplus for any period generally means:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    its cash balance on the closing date of its initial public
    offering in 1996; plus
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    $10.0&#160;million (as described below); plus
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all of ETP&#146;s cash receipts since the closing of its initial
    public offering, excluding cash from interim capital
    transactions such as borrowings that are not working capital
    borrowings, sales of equity and debt securities and sales or
    other dispositions of assets outside the ordinary course of
    business; plus
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    ETP&#146;s working capital borrowings made after the end of a
    quarter but before the date of determination of operating
    surplus for the quarter; less
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all of ETP&#146;s operating expenditures after the closing of
    its initial public offering, including the repayment of working
    capital borrowings, but not the repayment of other borrowings,
    and including maintenance capital expenditures; less
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount of ETP&#146;s cash reserves that the general partner
    of ETP deems necessary or advisable to provide funds for future
    operating expenditures.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Definition of Capital Surplus.</I>&#160;&#160;Generally,
    ETP&#146;s capital surplus will be generated only by:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    borrowings other than working capital borrowings;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    sales of ETP&#146;s of debt and equity securities;&#160;and
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    42
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    ETP&#146;s sales or other disposition of assets for cash, other
    than inventory, accounts receivable and other current assets
    sold in the ordinary course of business or as part of normal
    retirements or replacements of assets.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Characterization of Cash Distributions.</I>&#160;&#160;ETP
    treats all of its available cash distributed as coming from its
    operating surplus until the sum of all available cash
    distributed since it began operations equals the operating
    surplus as of the most recent date of determination of available
    cash. ETP treats any amount distributed in excess of operating
    surplus, regardless of its source, as capital surplus. As
    reflected above, operating surplus includes $10.0&#160;million
    in addition to its cash balance on the closing date of its
    initial public offering in 1996, cash receipts from its
    operations and cash from working capital borrowings. This amount
    does not reflect actual cash on hand that is available for
    distribution to its unitholders. Rather, it is a provision that
    enables ETP, if it chooses, to distribute as operating surplus
    up to $50.0&#160;million of cash we receive in the future from
    non-operating sources, such as asset sales, issuances of
    securities, and long-term borrowings, that would otherwise be
    distributed as capital surplus. We have not made, and we do not
    anticipate that we will make, any distributions from capital
    surplus.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Incentive
    Distribution Rights</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s incentive distribution rights represent the
    contractual right of the general partner of ETP to receive a
    specified percentage of quarterly distributions of available
    cash from operating surplus after the minimum quarterly
    distribution has been paid by ETP. Please read &#147;&#151;
    Distributions of Available Cash from Operating Surplus&#148;
    below. ETP&#146;s general partner owns all of the incentive
    distribution rights, except that in conjunction with the August
    2000 transaction with Energy Transfer Partners GP, L.P., ETP
    issued 1,000,000 class&#160;C units to Heritage Holdings, its
    general partner at that time, in conversion of that portion of
    Heritage Holdings&#146; incentive distribution rights that
    entitled it to receive any distribution made by ETP of funds
    attributable to the net amount received by ETP in connection
    with the settlement, judgment, award or other final
    nonappealable resolution of the SCANA litigation. In January
    2004, the class&#160;C units were distributed by Heritage
    Holdings to the owners of its equity interests. On July&#160;14,
    2006, all 1,000,000 outstanding class&#160;C units were retired
    and cancelled.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions
    of Available Cash from Operating Surplus</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP is required to make distributions of its available cash from
    operating surplus for any quarter in the following manner:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>First</I>, 98% to all common, class&#160;E unitholders of
    ETP, in accordance with their percentage interests, and 2% to
    the general partner, until each common unit has received $0.25
    per unit for such quarter (the &#147;minimum quarterly
    distribution&#148;);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Second</I>, 98% to all common, class&#160;E unitholders of
    ETP, in accordance with their percentage interests, and 2% to
    the general partner, until each common unit has received $0.275
    per unit for such quarter (the &#147;first target cash
    distribution&#148;);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Third</I>, 85% to all common, class&#160;E unitholders of
    ETP, in accordance with their percentage interests, 13% to the
    holders of incentive distribution rights, pro rata, and 2% to
    the general partner, until each common unit has received $0.3175
    per unit for such quarter (the &#147;second target cash
    distribution&#148;);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Fourth</I>, 75% to all common, class&#160;E unitholders of
    ETP, in accordance with their percentage interests, 23% to the
    holders of incentive distribution rights, pro rata, and 2% to
    the general partner, until each common unit has received $0.4125
    per unit for such quarter (the &#147;third target cash
    distribution&#148;);&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Fifth</I>, thereafter, 50% to all common, class&#160;E
    unitholders of ETP, in accordance with their percentage
    interests, 48% to the holders of incentive distribution rights,
    pro rata, and 2% to the general partner.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Notwithstanding the foregoing, the distributions to the
    class&#160;E unitholders may not exceed $1.41 per unit per year.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    43
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions
    of Available Cash from Capital Surplus</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP will make distributions of its available cash from capital
    surplus, if any, in the following manner:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>First</I>, 98% to all of its unitholders, pro rata, and 2% to
    its general partner, until ETP distributes for each ETP common
    unit, an amount of available cash from capital surplus equal to
    its initial public offering price;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Thereafter</I>, ETP will make all distributions of its
    available cash from capital surplus as if they were from
    operating surplus.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s partnership agreement treats a distribution of
    capital surplus as the repayment of the initial unit price from
    the initial public offering, which is a return of capital. The
    initial public offering price per ETP common unit less any
    distributions of capital surplus per unit is referred to as the
    &#147;unrecovered capital&#148; of ETP.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If ETP combines its units into fewer units or subdivide its
    units into a greater number of units, ETP will proportionately
    adjust its minimum quarterly distribution; its target cash
    distribution levels; and its unrecovered capital.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For example, if a two-for-one split of the common units of ETP
    should occur, the unrecovered capital of ETP would each be
    reduced to 50% of its initial level. ETP will not make any
    adjustment by reason of its issuance of additional units for
    cash or property.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On January&#160;14, 2005, ETP&#146;s general partner announced a
    two-for-one split of its common units that was effected on
    March&#160;15, 2005. As a result, the minimum quarterly
    distribution and the target cash distribution levels of ETP were
    reduced to 50% of their initial levels. The adjusted minimum
    quarterly distribution and the adjusted target cash distribution
    levels of ETP are reflected in the discussion above under the
    caption &#147;Distributions of Available Cash from Operating
    Surplus.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, if legislation is enacted or if existing law is
    modified or interpreted in a manner that causes ETP to become
    taxable as a corporation or otherwise subject to taxation as an
    entity for federal, state or local income tax purposes, ETP will
    reduce its minimum quarterly distribution and the target cash
    distribution levels by multiplying the same by one minus the sum
    of the highest marginal federal corporate income tax rate that
    could apply and any increase in the effective overall state and
    local income tax rates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions
    of Cash Upon Liquidation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>General.</I>&#160;&#160;If ETP dissolves in accordance with
    its partnership agreement, it will sell or otherwise dispose of
    its assets in a process called liquidation. ETP will first apply
    the proceeds of its liquidation to the payment of its creditors.
    ETP will distribute any remaining proceeds to its unitholders
    and its general partner, in accordance with their capital
    account balances, as adjusted to reflect any gain or loss upon
    the sale or other disposition of its assets in liquidation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any further net gain recognized upon liquidation will be
    allocated in a manner that takes into account the incentive
    distribution rights of ETP&#146;s general partner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Manner of Adjustments for Gain.</I>&#160;&#160;The manner of
    the adjustment for gain is set forth in ETP&#146;s partnership
    agreement in the following manner:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>First</I>, to the general partner and the holders of units of
    ETP who have negative balances in their capital accounts to the
    extent of and in proportion to those negative balances;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Second</I>, 98% to the common unitholders of ETP, pro rata,
    and 2% to the general partner of ETP, until the capital account
    for each common unit is equal to the sum of:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    its unrecovered capital;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    the amount of the minimum quarterly distribution of ETP for the
    quarter during which our liquidation occurs;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    44
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Third</I>, 98% to all unitholders of ETP, pro rata, and 2% to
    the general partner of ETP, until we allocate under this
    paragraph an amount per ETP unit equal to:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    the sum of the excess of the first target cash distribution per
    ETP unit over the minimum quarterly distribution per ETP unit
    for each quarter of our existence; less
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    the cumulative amount per ETP unit of any distributions of
    ETP&#146;s available cash from operating surplus in excess of
    the minimum quarterly distribution per ETP unit that it
    distributed 98% to its unitholders, pro rata, and 2% to its
    general partner, for each quarter of its existence;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Fourth</I>, 85% to all unitholders of ETP, pro rata, 13% to
    the holders of the incentive distribution rights of ETP, pro
    rata, and 2% to the general partner of ETP, until ETP allocates
    under this paragraph an amount per ETP unit equal to:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    the sum of the excess of the second target cash distribution per
    ETP unit over the first target cash distribution per ETP unit
    for each quarter of ETP&#146;s existence; less
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    the cumulative amount per ETP unit of any distributions of
    ETP&#146;s available cash from operating surplus in excess of
    the first target cash distribution per ETP unit that it
    distributed 85% to the unitholders of ETP, pro rata, 13% to the
    holders of the incentive distribution rights of ETP, pro rata,
    and 2% to the general partner of ETP for each quarter of its
    existence;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Fifth</I>, 75% to all unitholders of ETP, pro rata, 23% to
    the holders of the incentive distribution rights of ETP, pro
    rata, and 2% to the general partner of ETP, until ETP allocates
    under this paragraph an amount per ETP unit equal to:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    the sum of the excess of the third target cash distribution per
    ETP unit over the second target cash distribution per ETP unit
    for each quarter of its existence; less
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    the cumulative amount per ETP unit of any distributions of
    ETP&#146;s available cash from operating surplus in excess of
    the second target cash distribution per ETP unit that it
    distributed 75% to the unitholders of ETP, pro rata, 23% to the
    holders of the incentive distribution rights of ETP, pro rata,
    and 2% to the general partner of ETP for each quarter of its
    existence;&#160;and
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Sixth</I>, thereafter, 50% to all unitholders of ETP, pro
    rata, 48% to the holders of the incentive distribution rights of
    ETP, pro rata, and 2% to the general partner of ETP.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Manner of Adjustments for Losses.</I>&#160;&#160;Upon
    ETP&#146;s liquidation, ETP will generally allocate any loss to
    its general partner and its unitholders in the following manner:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>First</I>, 98% to the holders of common units of ETP in
    proportion to the positive balances in their capital accounts
    and 2% to the general partner of ETP, until the capital accounts
    of the common unitholders of ETP have been reduced to
    zero;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Second</I>, thereafter, 100% to the general partner of ETP.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Adjustments to Capital Accounts upon the Issuance of
    Additional Units.</I>&#160;&#160;ETP will make adjustments to
    its capital accounts upon its issuance of additional units. In
    doing so, ETP will allocate any unrealized and, for tax
    purposes, unrecognized gain or loss resulting from the
    adjustments to its unitholders and its general partner in the
    same manner as it allocates gain or loss upon liquidation. In
    the event that ETP makes positive adjustments to its capital
    accounts upon its issuance of additional units, ETP will
    allocate any later negative adjustments to its capital accounts
    resulting from its issuance of additional units or upon its
    liquidation in a manner which results, to the extent possible,
    in its general partner&#146;s capital account balances equaling
    the amount which they would have been if no earlier positive
    adjustments to its capital accounts had been made.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    45
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "MATERIAL PROVISIONS OF OUR PARTNERSHIP AGREEMENT" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='110'></A><B><FONT style="font-family: 'Times New Roman', Times">MATERIAL
    PROVISIONS OF OUR PARTNERSHIP AGREEMENT</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a summary of the material provisions of our
    partnership agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We summarize the following provisions of our partnership
    agreement elsewhere in this prospectus:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    with regard to rights of holders of units, please read
    &#147;Description of Our Common Units;&#148;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    with regard to allocations of taxable income and other matters,
    please read &#147;Material Tax Consequences.&#148;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Organization
    and Duration</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We were formed in September 2002 as La&#160;Grange Energy, L.P.,
    a Texas limited partnership. In February 2004, we changed our
    name to Energy Transfer Company, L.P. In August 2005, we
    converted from a Texas limited partnership to a Delaware limited
    partnership and changed our name to Energy Transfer Equity, L.P.
    We have a perpetual existence.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Purpose</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under our partnership agreement, we are permitted to engage,
    directly or indirectly, in any business activity that is
    approved by our general partner and that lawfully may be
    conducted by a limited partnership organized under Delaware law,
    provided that our general partner may not cause us to engage,
    directly or indirectly, in any business activity that our
    general partner determines would cause us to be treated as an
    association taxable as a corporation or otherwise taxable as an
    entity for federal income tax purposes.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Power of
    Attorney</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each limited partner, and each person who acquires a unit from a
    unitholder, by accepting the unit, automatically grants to our
    general partner and, if appointed, a liquidator, a power of
    attorney to, among other things, execute and file documents
    required for our qualification, continuance or dissolution. The
    power of attorney also grants the authority to amend, and to
    make consents and waivers under, our partnership agreement.
    Please read &#145;&#145;&#151; Amendments to Our Partnership
    Agreement.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Capital
    Contributions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unitholders are not obligated to make additional capital
    contributions, except as described below under &#147;&#151;
    Limited Liability.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Limited
    Liability</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Assuming that a limited partner does not participate in the
    control of our business within the meaning of the Delaware Act
    and that he otherwise acts in conformity with the provisions of
    our partnership agreement, his liability under the Delaware Act
    will be limited, subject to possible exceptions, to the amount
    of capital he is obligated to contribute to us for his units
    plus his share of any undistributed profits and assets. If it
    were determined, however, that the right, or exercise of the
    right, by the limited partners as a group:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to remove or replace the general partner;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to approve some amendments to the partnership agreement;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to take other action under the partnership agreement;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    constituted &#147;participation in the control&#148; of our
    business for the purposes of the Delaware Act, then the limited
    partners could be held personally liable for our obligations
    under the laws of Delaware, to the same extent as the general
    partner. This liability would extend to persons who transact
    business with us and reasonably believe that the limited partner
    is a general partner. Neither our partnership agreement nor the
    Delaware Act specifically provides for legal recourse against
    the general partner if a limited partner were to lose limited
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    46
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    liability through any fault of the general partner. While this
    does not mean that a limited partner could not seek legal
    recourse, we know of no precedent for this type of a claim in
    Delaware case law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the Delaware Act, a limited partnership may not make a
    distribution to a partner if, after the distribution, all
    liabilities of the limited partnership, other than liabilities
    to partners on account of their partnership interests and
    liabilities for which the recourse of creditors is limited to
    specific property of the partnership, would exceed the fair
    value of the assets of the limited partnership. For the purpose
    of determining the fair value of the assets of a limited
    partnership, the Delaware Act provides that the fair value of
    property subject to liability for which recourse of creditors is
    limited shall be included in the assets of the limited
    partnership only to the extent that the fair value of that
    property exceeds the nonrecourse liability. The Delaware Act
    provides that a limited partner who receives a distribution and
    knew at the time of the distribution that the distribution was
    in violation of the Delaware Act shall be liable to the limited
    partnership for the amount of the distribution for three years.
    Under the Delaware Act, a substituted limited partner of a
    limited partnership is liable for the obligations of his
    assignor to make contributions to the partnership, except that
    such person is not obligated for liabilities unknown to him at
    the time he became a limited partner and that could not be
    ascertained from the partnership agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Limitations on the liability of limited partners for the
    obligations of a limited partner have not been clearly
    established in many jurisdictions. While we currently have no
    operations distinct from ETP, if in the future, by our ownership
    in an operating company or otherwise, it were determined that we
    were conducting business in any state without compliance with
    the applicable limited partnership or limited liability company
    statute, or that the right or exercise of the right by the
    limited partners as a group to remove or replace the general
    partner, to approve some amendments to our partnership
    agreement, or to take other action under our partnership
    agreement constituted &#147;participation in the control&#148;
    of our business for purposes of the statutes of any relevant
    jurisdiction, then the limited partners could be held personally
    liable for our obligations under the law of that jurisdiction to
    the same extent as the general partner under the circumstances.
    We will operate in a manner that the general partner considers
    reasonable and necessary or appropriate to preserve the limited
    liability of the limited partners.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Voting
    Rights</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a summary of the unitholder vote required for
    the matters specified below. In voting their units, affiliates
    of our general partner will have no fiduciary duty or obligation
    whatsoever to us or the limited partners, including any duty to
    act in good faith or in the best interests of us or the limited
    partners.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
<DIV style="text-indent: -5%; margin-left: 5%">
    Issuance of additional units </DIV>
</TD>
    <TD></TD>
    <TD valign="top">
    No approval right.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
<DIV style="text-indent: -5%; margin-left: 5%">
    Amendment of our partnership agreement </DIV>
</TD>
    <TD></TD>
    <TD valign="top">
    Certain amendments may be made by our general partner without
    the approval of our unitholders. Other amendments generally
    require the approval of a majority of our outstanding units.
    Please read &#145;&#145;&#151; Amendments to Our Partnership
    Agreement.&#148;</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
<DIV style="text-indent: -5%; margin-left: 5%">
    Merger of our partnership or the sale of all or substantially
    all of our assets </DIV>
</TD>
    <TD></TD>
    <TD valign="top">
    A majority of our outstanding units in certain circumstances.
    Please read &#147;&#151; Merger, Sale or Other Disposition of
    Assets.&#148;</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
<DIV style="text-indent: -5%; margin-left: 5%">
    Dissolution of our partnership </DIV>
</TD>
    <TD></TD>
    <TD valign="top">
    A majority of our outstanding units. Please read &#147;&#151;
    Termination or Dissolution.&#148;</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
<DIV style="text-indent: -5%; margin-left: 5%">
    Reconstitution of our partnership upon dissolution </DIV>
</TD>
    <TD></TD>
    <TD valign="top">
    A majority of our outstanding units. Please read &#147;&#151;
    Termination or Dissolution.&#148;</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
<DIV style="text-indent: -5%; margin-left: 5%">
    Withdrawal of our general partner </DIV>
</TD>
    <TD></TD>
    <TD valign="top">
    Under most circumstances, the approval of a majority of the
    units, excluding units held by our general partner and its
    affiliates, is required for the withdrawal of the general
    partner prior to June&#160;30, 2015 in a manner that would cause
    a dissolution of our partnership. Please read &#147;&#151;
    Withdrawal or Removal of Our general partner.&#148;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    47
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
<DIV style="text-indent: -5%; margin-left: 5%">
    Removal of our general partner </DIV>
</TD>
    <TD></TD>
    <TD valign="top">
    Not less than
    66<FONT style="vertical-align: top; font-size: 70&#37;">2</FONT>/<FONT style="font-size: 70&#37;">3</FONT>
    of the outstanding units, including units held by our general
    partner and its affiliates. Please read &#147;&#151; Withdrawal
    or Removal of Our general partner.&#148;</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
<DIV style="text-indent: -5%; margin-left: 5%">
    Transfer of the general partner interest </DIV>
</TD>
    <TD></TD>
    <TD valign="top">
    Our general partner may transfer all, but not less than all, of
    its general partner interest in us without a vote of our
    unitholders to (i)&#160;an affiliate (other than an individual)
    or (ii)&#160;another entity in connection with its merger or
    consolidation with or into, or sale of all or substantially all
    of its assets to, such person. The approval of a majority of the
    units, excluding units held by the general partner and its
    affiliates, is required in other circumstances for a transfer of
    the general partner interest to a third party prior to
    December&#160;31, 2015. Please read &#145;&#145;&#151; Transfer
    of General Partner Interest.&#148;</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
<DIV style="text-indent: -5%; margin-left: 5%">
    Transfer of ownership interests in our general partner </DIV>
</TD>
    <TD></TD>
    <TD valign="top">
    No approval required at any time. Please read &#147;&#151;
    Transfer of Ownership Interests in our general partner.&#148;</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Issuance
    of Additional Securities</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement authorizes us to issue an unlimited
    number of additional limited partner interests and other equity
    securities that are senior to, equal in rank with or junior to
    our units on terms and conditions established by our general
    partner in its sole discretion without the approval of our
    unitholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is possible that we will fund acquisitions through the
    issuance of additional units or other equity securities. Holders
    of any additional units we issue will be entitled to share
    equally with the then-existing holders of units in our cash
    distributions. In addition, the issuance of additional
    partnership interests may dilute the value of the interests of
    the then-existing holders of units in our net assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In accordance with Delaware law and the provisions of our
    partnership agreement, we may also issue additional partnership
    interests that, in the sole discretion of our general partner,
    may have special voting rights to which units are not entitled.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon issuance of additional units or other partnership
    securities, our general partner will have the option but not the
    obligation to make additional capital contributions to the
    extent it desires to maintain its general partner interest in
    us. Our general partner and its affiliates have the right, which
    they may from time to time assign in whole or in part to any of
    their affiliates, to purchase units or other equity securities
    whenever, and on the same terms that, we issue those securities
    to persons other than our general partner and its affiliates, to
    the extent necessary to maintain their percentage interests in
    us that existed immediately prior to the issuance. As of
    May&#160;31, 2007, affiliates of our general partner, excluding
    Enterprise GP Holdings L.P., hold approximately 37.4% of our
    outstanding common units. The holders of units do not have
    preemptive rights to acquire additional units or other
    partnership interests in us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Amendments
    to Our Partnership Agreement</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">General</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Amendments to our partnership agreement may be proposed only by
    or with the consent of our general partner. However, our general
    partner will have no duty or obligation to propose any amendment
    and may decline to do so free of any fiduciary duty or
    obligation whatsoever to us or the limited partners, including
    any duty to act in good faith or in the best interests of us or
    the limited partners. In order to adopt a proposed amendment,
    other than the amendments discussed below, our general partner
    is required to seek written approval of the holders of the
    number of units required to approve the amendment or call a
    meeting of the limited partners to consider and vote upon the
    proposed amendment. Except as described below, an amendment must
    be approved by a majority of our outstanding units.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    48
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Prohibited
    Amendments</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No amendment may be made that would:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;enlarge the obligations of any limited partner without
    its consent, unless approved by at least a majority of the type
    or class of limited partner interests so affected;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;enlarge the obligations of, restrict in any way any
    action by or rights of, or reduce in any way the amounts
    distributable, reimbursable or otherwise payable by us to our
    general partner or any of its affiliates without the consent of
    our general partner, which may be given or withheld at its
    option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The provision of our partnership agreement preventing the
    amendments having the effects described in clauses&#160;(1) or
    (2)&#160;above can be amended upon the approval of the holders
    of at least 90% of the outstanding units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">No
    Unitholder Approval</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner may generally make amendments to our
    partnership agreement without the approval of any limited
    partner to reflect:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;a change in the name of the partnership, the location
    of the partnership&#146;s principal place of business, the
    partnership&#146;s registered agent or its registered office;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;the admission, substitution, withdrawal or removal of
    partners in accordance with our partnership agreement;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;a change that, in the sole discretion of our general
    partner, is necessary or advisable for the partnership to
    qualify or to continue our qualification as a limited
    partnership or a partnership in which the limited partners have
    limited liability under the laws of any state or to ensure that
    the partnership will not be treated as an association taxable as
    a corporation or otherwise taxed as an entity for federal income
    tax purposes;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (4)&#160;an amendment that is necessary, in the opinion of our
    counsel, to prevent the partnership or our general partner or
    its directors, officers, agents or trustees, from in any manner
    being subjected to the provisions of the Investment Company Act
    of 1940, the Investment Advisors Act of 1940, or &#147;plan
    asset&#148; regulations adopted under the Employee Retirement
    Income Security Act of 1974, whether or not substantially
    similar to plan asset regulations currently applied or proposed;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (5)&#160;any amendment expressly permitted in our partnership
    agreement to be made by our general partner acting alone;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (6)&#160;an amendment effected, necessitated or contemplated by
    a merger agreement that has been approved under the terms of our
    partnership agreement;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (7)&#160;any amendment that, in the discretion of our general
    partner, is necessary or advisable for the formation by the
    partnership of, or its investment in, any corporation,
    partnership or other entity, as otherwise permitted by our
    partnership agreement;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (8)&#160;a change in our fiscal year or taxable year and related
    changes;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (9)&#160;certain mergers or conveyances set forth in our
    partnership agreement;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (10)&#160;any other amendments substantially similar to any of
    the matters described in (1)&#160;through (9)&#160;above.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, our general partner may make amendments to our
    partnership agreement without the approval of any limited
    partner or assignee if our general partner determines that those
    amendments:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;do not adversely affect our limited partners in any
    material respect;
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    49
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;are necessary or advisable to satisfy any requirements,
    conditions or guidelines contained in any opinion, directive,
    order, ruling or regulation of any federal or state agency or
    judicial authority or contained in any federal or state statute;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;are necessary or advisable to facilitate the trading of
    limited partner interests or to comply with any rule,
    regulation, guideline or requirement of any securities exchange
    on which the limited partner interests are or will be listed for
    trading, compliance with any of which our general partner deems
    to be in the partnership&#146;s best interest and the best
    interest of our limited partners;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (4)&#160;are necessary or advisable for any action taken by our
    general partner relating to splits or combinations of units
    under the provisions of our partnership agreement;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (5)&#160;are required to effect the intent of the provisions of
    our partnership agreement or are otherwise contemplated by our
    partnership agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Opinion
    of Counsel and Unitholder Approval</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner will not be required to obtain an opinion of
    counsel that an amendment will not result in a loss of limited
    liability to the limited partners or result in our being treated
    as an entity for federal income tax purposes in connection with
    any of the amendments described under &#147;&#151; Amendments to
    Our Partnership Agreement&#160;&#151; No Unitholder
    Approval.&#148; No other amendments to our partnership agreement
    requiring the approval of holders of at least 90% of the
    outstanding units will become effective unless we first obtain
    an opinion of counsel to the effect that the amendment will not
    affect the limited liability under applicable law of any of our
    limited partners. Any amendment that reduces the voting
    percentage required to take any action must be approved by the
    affirmative vote of limited partners constituting not less than
    the voting requirement sought to be reduced.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Merger,
    Sale or Other Disposition of Assets</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement generally prohibits our general
    partner, without the prior approval of a majority of our
    outstanding units, from causing us to, among other things, sell,
    exchange or otherwise dispose of all or substantially all of our
    assets in a single transaction or a series of related
    transactions, including by way of merger, consolidation or other
    combination, or approving on our behalf the sale, exchange or
    other disposition of all or substantially all of the assets of
    our subsidiaries. Our general partner may, however, mortgage,
    pledge, hypothecate or grant a security interest in all or
    substantially all of our assets without that approval. Our
    general partner may also sell all or substantially all of our
    assets under a foreclosure or other realization upon those
    encumbrances without that approval.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If conditions specified in our partnership agreement are
    satisfied, our general partner may merge us or any of our
    subsidiaries into, or convey some or all of our assets to, a
    newly formed entity if the sole purpose of that merger or
    conveyance is to effect a mere change in our legal form into
    another limited liability entity. The unitholders are not
    entitled to dissenters&#146; rights of appraisal under our
    partnership agreement or applicable Delaware law in the event of
    a merger or consolidation, a sale of substantially all of our
    assets or any other transaction or event.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Termination
    or Dissolution</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will continue as a limited partnership until terminated under
    our partnership agreement. We will dissolve upon:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;the election of our general partner to dissolve us, if
    approved by the holders of a majority of our outstanding units,
    excluding those units held by our general partner and its
    affiliates;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;there being no limited partners, unless we are
    continued without dissolution in accordance with applicable
    Delaware law;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;the entry of a decree of judicial dissolution of our
    partnership;&#160;or
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    50
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (4)&#160;the withdrawal or removal of our general partner or any
    other event that results in its ceasing to be our general
    partner other than by reason of a transfer of its general
    partner interest in accordance with our partnership agreement or
    withdrawal or removal following approval and admission of a
    successor.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon a dissolution under clause&#160;(4) above, the holders of a
    majority of our outstanding units may also elect, excluding any
    units held by our general partner and its affiliates, within
    specific time limitations, to continue our business on the same
    terms and conditions described in our partnership agreement by
    appointing as a successor general partner an entity approved by
    the holders of a majority of our outstanding units, excluding
    those units held by our general partner and its affiliates,
    subject to receipt by us of an opinion of counsel to the effect
    that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the action would not result in the loss of limited liability of
    any limited partner;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    neither our partnership nor Energy Transfer Partners would be
    treated as an association taxable as a corporation or otherwise
    be taxable as an entity for federal income tax purposes upon the
    exercise of that right to continue.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Liquidation
    and Distribution of Proceeds</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon our dissolution, unless we are reconstituted and continued
    as a new limited partnership, the person authorized to wind up
    our affairs (the liquidator) will, acting with all the powers of
    our general partner that the liquidator deems necessary or
    desirable in its good faith judgment, liquidate our assets. The
    proceeds of the liquidation will be applied as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>first</I>, towards the payment of all of our creditors and
    the creation of a reserve for contingent liabilities;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>then</I>, to all partners in accordance with the positive
    balance in the respective capital accounts.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under some circumstances and subject to some limitations, the
    liquidator may defer liquidation or distribution of our assets
    for a reasonable period of time. If the liquidator determines
    that a sale would be impractical or would cause a loss to our
    partners, our general partner may distribute assets in kind to
    our partners.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Withdrawal
    or Removal of Our General Partner</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as described below, our general partner has agreed not to
    withdraw voluntarily as our general partner prior to
    December&#160;31, 2015 without obtaining the approval of a
    majority of our outstanding units, excluding those held by our
    general partner and its affiliates, and furnishing an opinion of
    counsel regarding limited liability and tax matters. On or after
    December&#160;31, 2015, our general partner may withdraw as
    general partner without first obtaining approval of any
    unitholder by giving 90&#160;days&#146; written notice, and that
    withdrawal will not constitute a violation of our partnership
    agreement. In addition, our general partner may withdraw without
    unitholder approval upon 90&#160;days&#146; notice to our
    limited partners if at least 50% of our outstanding units are
    held or controlled by one person and its affiliates other than
    our general partner and its affiliates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon the voluntary withdrawal of our general partner, the
    holders of a majority of our outstanding units, excluding the
    units held by the withdrawing general partner and its
    affiliates, may elect a successor to the withdrawing general
    partner. If a successor is not elected, or is elected but an
    opinion of counsel regarding limited liability and tax matters
    cannot be obtained, we will be dissolved, wound up and
    liquidated, unless within 90&#160;days after that withdrawal,
    the holders of a majority of our outstanding units, excluding
    the units held by the withdrawing general partner and its
    affiliates, agree to continue our business and to appoint a
    successor general partner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner may not be removed unless that removal is
    approved by not less than
    66<FONT style="vertical-align: top; font-size: 70&#37;">2</FONT>/<FONT style="font-size: 70&#37;">3</FONT>%
    of our outstanding units, including units held by our general
    partner and its affiliates, and we receive an opinion of counsel
    regarding limited liability and tax matters. In addition, if our
    general partner is removed as our general partner under
    circumstances where cause does not exist and units held by our
    general partner and its affiliates
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    51
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    are not voted in favor of such removal, our general partner will
    have the right to convert its general partner interest into
    units or to receive cash in exchange for such interests. Any
    removal of this kind is also subject to the approval of a
    successor general partner by a majority of our outstanding
    units, including those held by our general partner and its
    affiliates. The ownership of more than
    33<FONT style="vertical-align: top; font-size: 70&#37;">1</FONT>/<FONT style="font-size: 70&#37;">3</FONT>%
    of the outstanding units by our general partner and its
    affiliates would give it the practical ability to prevent its
    removal. Affiliates of our general partner, excluding Enterprise
    GP Holdings L.P., own approximately 37.4% of the outstanding
    common units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event of removal of a general partner under circumstances
    where cause exists or withdrawal of a general partner where that
    withdrawal violates our partnership agreement, a successor
    general partner will have the option to purchase the general
    partner interest of the departing general partner for a cash
    payment equal to its fair market value. Under all other
    circumstances where a general partner withdraws or is removed by
    the limited partners, the departing general partner will have
    the option to require the successor general partner to purchase
    the general partner interest of the departing general partner
    for a cash payment equal to its fair market value. In each case,
    this fair market value will be determined by agreement between
    the departing general partner and the successor general partner.
    If no agreement is reached, an independent investment banking
    firm or other independent expert selected by the departing
    general partner and the successor general partner will determine
    the fair market value. Or, if the departing general partner and
    the successor general partner cannot agree upon an expert, then
    an expert chosen by agreement of the experts selected by each of
    them will determine the fair market value.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the option described above is not exercised by either the
    departing general partner or the successor general partner, the
    departing general partner&#146;s general partner interest will
    automatically convert into units equal to the fair market value
    of those interests as determined by an investment banking firm
    or other independent expert selected in the manner described in
    the preceding paragraph.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, we will be required to reimburse the departing
    general partner for all amounts due the departing general
    partner, including, without limitation, all employee-related
    liabilities, including severance liabilities, incurred for the
    termination of any employees employed by the departing general
    partner or its affiliates for our benefit.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transfer
    of General Partner Interest</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except for transfer by our general partner of all, but not less
    than all, of its general partner interest in us to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an affiliate of the general partner (other than an
    individual);&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    another entity as part of the merger or consolidation of the
    general partner with or into another entity or the transfer by
    the general partner of all or substantially all of its assets to
    another entity,
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    our general partner may not transfer all or any part of its
    general partner interest in us to another entity prior to
    obtaining the approval of a majority of the units outstanding,
    excluding units held by our general partner and its affiliates.
    As a condition of this transfer, the transferee must assume the
    rights and duties of our general partner, agree to be bound by
    the provisions of the partnership agreement, and furnish an
    opinion of counsel regarding limited liability and tax matters.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner and it affiliates may at any time transfer
    units to one or more persons without unitholder approval.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transfer
    of Ownership Interests in Our General Partner</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At any time, Kelcy L. Warren, Enterprise GP Holdings L.P. and
    Natural Gas Partners VI, L.P., as the members of our general
    partner, may sell or transfer all or part of their ownership
    interest in the general partner without the approval of our
    unitholders.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    52
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Change of
    Management Provisions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement contains specific provisions that are
    intended to discourage a person or group from attempting to
    remove our general partner as general partner or otherwise
    change management. If any person or group other than our general
    partner and its affiliates acquires beneficial ownership of 20%
    or more of any class of units, that person or group loses voting
    rights on all of its units. This loss of voting rights does not
    apply to any person or group that acquires the units from our
    general partner or its affiliates and any transferees of that
    person or group approved by our general partner.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Limited
    Call Right</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If at any time our general partner and its affiliates hold more
    than 90% of the outstanding limited partner interests of any
    class, our general partner will have the right, but not the
    obligation, which it may assign in whole or in part to any of
    its affiliates or us, to acquire all, but not less than all, of
    the remaining limited partner interests of the class held by
    unaffiliated persons as of a record date to be selected by our
    general partner, on at least 10 but not more than
    60&#160;days&#146; notice. The purchase price in the event of
    this purchase is the greater of:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the highest cash price paid by either our general partner or any
    of its affiliates for any limited partners interests of the
    class purchased within the 90&#160;days preceding the date our
    general partner first mails notice of its election to purchase
    the limited partner interests;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the current market price of the limited partner interests of the
    class as of the date three days prior to the date that notice is
    mailed.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result of our general partner&#146;s right to purchase
    outstanding limited partner interests, a holder of limited
    partner interests may have his limited partner interests
    purchased at an undesirable time or price. The tax consequences
    to a unitholder of the exercise of this call right are the same
    as a sale by that unitholder of his units in the market. Please
    read &#147;Material Tax Consequences&#160;&#151; Disposition of
    Units.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of May&#160;31, 2007, affiliates of our general partner,
    excluding Enterprise GP Holdings L.P., own approximately
    83.6&#160;million of our common units, representing
    approximately 37.4% of our outstanding common units. Enterprise
    GP Holdings L.P. owns approximately 39.0&#160;million of our
    common units, representing approximately 17.4% of our
    outstanding common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Non-Taxpaying
    Assignees; Redemption</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event we acquire an interstate pipeline that is subject
    to rate regulation of the Federal Energy Regulatory Commission,
    or FERC, our general partner will have the right under our
    partnership agreement to institute procedures, by giving notice
    to each of our unitholders, that would require transferees of
    common units and, upon the request of our general partner,
    existing holders of our common units to certify that they are
    Eligible Holders. The purpose of these certification procedures
    would be to enable us to utilize a federal income tax expense as
    a component of the pipeline&#146;s rate base upon which tariffs
    may be established under FERC rate making policies applicable to
    entities that pass-through their taxable income to their owners.
    Eligible Holders are individuals or entities subject to United
    States federal income taxation on the income generated by us or
    entities not subject to United States federal income taxation on
    the income generated by us, so long as all of the entity&#146;s
    owners are subject to such taxation. If these tax certification
    procedures are implemented, transferees of common units will be
    required to fill out a properly completed transfer application
    certifying, and our general partner, acting on our behalf, may
    at any time require each unitholder to re-certify;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    that the transferee or unitholder is an individual or an entity
    subject to United States federal income taxation on the income
    generated by us;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    that, if the transferee unitholder is an entity not subject to
    United States federal income taxation on the income generated by
    us, as in the case, for example, of a mutual fund taxed as a
    regulated investment company or a partnership, all the
    entity&#146;s owners are subject to United States federal income
    taxation on the income generated by us.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    53
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This certification can be changed in any manner our general
    partner determines is necessary or appropriate to implement its
    original purpose.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If, following institution of the certification procedures by our
    general partner, unitholders owning 10% or more of our
    outstanding common units, in the aggregate:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fail to furnish a transfer application containing the required
    certification;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fail to furnish a re-certification containing the required
    certification within 30&#160;days after request;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    is unable to provide a certification to the effect set forth in
    one of the two bullet points in the second preceding paragraph;
    then
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    we will have the right, which we may assign to any of our
    affiliates, to acquire all but not less than all of the units
    held by any such unitholder by giving written notice of
    redemption to such unitholder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The purchase price in the event of such an acquisition for each
    unit held by such unitholder will be equal to the current market
    price as of the date of redemption.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The purchase price will be paid in cash or by delivery of a
    promissory note, as determined by our general partner. Any such
    promissory note will bear interest at the rate of 5% annually
    and be payable in three equal annual installments of principal
    and accrued interest, commencing one year after the redemption
    date.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Meetings;
    Voting</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as described below regarding a person or group owning 20%
    or more of units then outstanding, unitholders on the record
    date will be entitled to notice of, and to vote at, meetings of
    our limited partners and to act upon matters for which approvals
    may be solicited. Units that are owned by non-citizen assignees
    will be voted by our general partner and our general partner
    will distribute the votes on those units in the same ratios as
    the votes of limited partners on other units are cast.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner does not anticipate that any meeting of
    unitholders will be called in the foreseeable future. Any action
    that is required or permitted to be taken by our unitholders may
    be taken either at a meeting of the unitholders or without a
    meeting if consents in writing describing the action so taken
    are signed by holders of the number of units as would be
    necessary to authorize or take that action at a meeting.
    Meetings of the unitholders may be called by our general partner
    or by unitholders owning at least 20% of the outstanding units.
    Unitholders may vote either in person or by proxy at meetings.
    The holders of a majority of the outstanding units, represented
    in person or by proxy, will constitute a quorum unless any
    action by the unitholders requires approval by holders of a
    greater percentage of the units, in which case the quorum will
    be the greater percentage.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each record holder of a unit has a vote according to his
    percentage interest in us, although additional limited partner
    interests having special voting rights could be issued. Please
    read &#147;&#151; Issuance of Additional Securities&#148; above.
    However, if at any time any person or group, other than our
    general partner and its affiliates, or a direct or subsequently
    approved transferee of our general partner or its affiliates,
    acquires, in the aggregate, beneficial ownership of 20% or more
    of any class of units then outstanding, that person or group
    will lose voting rights on all of its units and the units may
    not be voted on any matter and will not be considered to be
    outstanding when sending notices of a meeting of unitholders,
    calculating required votes, determining the presence of a quorum
    or for other similar purposes. Units held in nominee or street
    name account will be voted by the broker or other nominee in
    accordance with the instruction of the beneficial owner unless
    the arrangement between the beneficial owner and his nominee
    provides otherwise.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any notice, demand, request, report or proxy material required
    or permitted to be given or made to record holders of units
    under our partnership agreement will be delivered to the record
    holder by us or by the transfer agent.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    54
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Status as
    Limited Partner</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    By transfer of units in accordance with our partnership
    agreement, each transferee of units shall be admitted as a
    limited partner with respect to the transferred units when such
    transfer and admission is reflected in our books and records.
    Except as described under &#147;&#151; Limited Liability,&#148;
    the units will be fully paid, and unitholders will not be
    required to make additional contributions.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Non-Citizen
    Assignees; Redemption</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we are or become subject to federal, state or local laws or
    regulations that, in the reasonable determination of our general
    partner, create a substantial risk of cancellation or forfeiture
    of any property that we have an interest in because of the
    nationality, citizenship or other related status of any limited
    partner, we may redeem the units held by the limited partner at
    their current market price. In order to avoid any cancellation
    or forfeiture, our general partner may require each limited
    partner to furnish information about his nationality,
    citizenship or related status. If a limited partner fails to
    furnish information about his nationality, citizenship or other
    related status within 30&#160;days after a request for the
    information or our general partner determines after receipt of
    the information that the limited partner is not an eligible
    citizen, the limited partner may be treated as a non-citizen
    assignee. A non-citizen assignee is entitled to an interest
    equivalent to that of a limited partner for the right to share
    in allocations and distributions from us, including liquidating
    distributions. A non-citizen assignee does not have the right to
    direct the voting of his units and may not receive distributions
    in kind upon our liquidation.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Indemnification</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under our partnership agreement, in most circumstances, we will
    indemnify the following persons, to the fullest extent permitted
    by law, from and against all losses, claims, damages or similar
    events:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;our general partner;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;any departing general partner;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;any person who is or was an affiliate of our general
    partner or any departing general partner;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (4)&#160;any person who is or was an officer, director, member,
    partner, fiduciary or trustee of any entity described in (1),
    (2)&#160;or (3)&#160;above;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (5)&#160;any person who is or was serving as an officer,
    director, member, partner, fiduciary or trustee of another
    person at the request of the general partner or any departing
    general partner;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (6)&#160;any person designated by our general partner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any indemnification under these provisions will only be out of
    our assets. Unless it otherwise agrees, our general partner will
    not be personally liable for, or have any obligation to
    contribute or loan funds or assets to us to enable us to
    effectuate, indemnification. We may purchase insurance against
    liabilities asserted against and expenses incurred by persons
    for our activities, regardless of whether we would have the
    power to indemnify the person against liabilities under the
    partnership agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Reimbursement
    of Expenses and Administrative Fee</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner receives a management fee of $500,000 for
    its management of us. Under the terms of the shared services
    agreement, we pay ETP an annual administrative fee of $500,000
    and reimburse ETP at cost for all services to us for the
    provision of various general and administrative services for our
    benefit.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement requires us to reimburse our general
    partner for all direct and indirect expenses it incurs or
    payments it makes on our behalf and all other expenses allocable
    to us or otherwise incurred by our general partner in connection
    with operating our business. These expenses include salary,
    bonus, incentive compensation and other amounts paid to persons
    who perform services for us or on our behalf and expenses
    allocated to our general partner by its affiliates. The general
    partner is entitled to determine in good faith the expenses that
    are allocable to us.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    55
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Books and
    Reports</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner is required to keep appropriate books of our
    business at our principal offices. The books will be maintained
    for both tax and financial reporting purposes on an accrual
    basis. For tax and fiscal reporting purposes, our fiscal year is
    the calendar year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will furnish or make available to record holders of units,
    within 120&#160;days after the close of each fiscal year, an
    annual report containing audited financial statements and a
    report on those financial statements by our independent public
    accountants. Except for our fourth quarter, we will also furnish
    or make available summary financial information within
    90&#160;days after the close of each quarter.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will furnish each record holder of a unit with information
    reasonably required for tax reporting purposes within
    90&#160;days after the close of each calendar year. This
    information is expected to be furnished in summary form so that
    some complex calculations normally required of partners can be
    avoided. Our ability to furnish this summary information to
    unitholders will depend on the cooperation of unitholders in
    supplying us with specific information. Every unitholder will
    receive information to assist him in determining his federal and
    state tax liability and filing his federal and state income tax
    returns, regardless of whether he supplies us with information.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Right to
    Inspect Our Books and Records</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A limited partner can, for a purpose reasonably related to the
    limited partner&#146;s interest as a limited partner, upon
    reasonable demand stating the purpose of such demand and at his
    own expense, obtain:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a current list of the name and last known address of each
    partner;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a copy of our tax returns;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    information as to the amount of cash and a description and
    statement of the agreed value of any other property or services,
    contributed or to be contributed by each partner and the date on
    which each became a partner;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    copies of our partnership agreement, our certificate of limited
    partnership, amendments to either of them and powers of attorney
    which have been executed under our partnership agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    information regarding the status of our business and financial
    condition;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any other information regarding our affairs as is just and
    reasonable.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner may, and intends to, keep confidential from
    the limited partners trade secrets and other information the
    disclosure of which our general partner believes in good faith
    is not in our best interest or which we are required by law or
    by agreements with third parties to keep confidential.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Registration
    Rights</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under our partnership agreement, we have agreed to register for
    resale under the Securities Act and applicable state securities
    laws any units or other partnership securities proposed to be
    sold by our general partner or any of its affiliates or their
    assignees if an exemption from the registration requirements is
    not otherwise available. We are obligated to pay all expenses
    incidental to the registration, excluding underwriting discounts
    and commissions.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    56
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "MATERIAL PROVISIONS OF ETP&#146;S PARTNERSHIP AGREEMENT" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='111'></A><B><FONT style="font-family: 'Times New Roman', Times">MATERIAL
    PROVISIONS OF<BR>
    ETP&#146;S PARTNERSHIP AGREEMENT</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a summary of material provisions of ETP&#146;s
    partnership agreement. For more information on distributions of
    ETP&#146;s available cash, please read &#147;ETP&#146;s Cash
    Distribution Policy.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Voting
    Rights</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP unitholders do not have voting rights except with respect to
    the following matters, for which ETP&#146;s partnership
    agreement requires the approval of the holders of a majority of
    the units, unless otherwise indicated:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a merger of ETP;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a sale or exchange of all or substantially all of the assets of
    ETP;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    dissolution or reconstitution of ETP upon dissolution;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    certain amendments to ETP&#146;s partnership agreement;&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the transfer to another person of ETP&#146;s incentive
    distribution rights at any time, except for transfers to
    affiliates of the general partner or transfers in connection
    with the general partner&#146;s merger or consolidation with or
    into, or sale of all or substantially all of its assets to,
    another person.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The removal of ETP&#146;s general partner requires the approval
    of not less than
    66<FONT style="vertical-align: top; font-size: 70&#37;">2</FONT>/<FONT style="font-size: 70&#37;">3</FONT>%
    of all outstanding units, including units held by its general
    partner and its affiliates. Any removal is subject to the
    election of a successor general partner by the holders of a
    majority of the outstanding common units, including units held
    by ETP&#146;s general partner and its affiliates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Issuance
    of Additional Securities</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s partnership agreement authorizes it to issue an
    unlimited number of additional partnership securities and rights
    to buy partnership securities for the consideration and on the
    terms and conditions established by its general partner in its
    general partners&#146; sole discretion, without the approval of
    the unitholders. Any such additional partnership securities may
    be senior to the common units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is possible that ETP will fund acquisitions through the
    issuance of additional common units or other equity securities.
    Holders of any additional common units ETP issues will be
    entitled to share equally with the then-existing holders of its
    common units in its distributions of available cash. In
    addition, the issuance of additional partnership interests may
    dilute the value of the interests of the then-existing holders
    of common units in ETP&#146;s net assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In accordance with Delaware law and the provisions of its
    partnership agreement, ETP may also issue additional partnership
    securities that, in the sole discretion of the general partner,
    may have special voting rights to which common units are not
    entitled.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon issuance of additional partnership securities, ETP&#146;s
    general partner will be required to make additional capital
    contributions to the extent necessary to maintain its 2.0%
    general partner interest in ETP. Moreover, ETP&#146;s general
    partner will have the right, which it may from time to time
    assign in whole or in part to any of its affiliates, to purchase
    ETP&#146;s common units or other equity securities whenever, and
    on the same terms that, ETP issues those securities to persons
    other than its general partner and its affiliates, to the extent
    necessary to maintain its percentage interest, including its
    interest represented by ETP&#146;s common units, that existed
    immediately prior to each issuance. The holders of ETP&#146;s
    common units will not have preemptive rights to acquire
    additional common units or other partnership securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following matters require the approval of the majority of
    the outstanding common units, including the common units owned
    by the general partner and its affiliates:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a merger of our partnership;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a sale or exchange of all or substantially all of our assets;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    57
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    dissolution or reconstitution of our partnership upon
    dissolution;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    certain amendments to the partnership agreement;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the transfer to another person of our incentive distribution
    rights at any time, except for transfers to affiliates of the
    general partner or transfers in connection with the general
    partner&#146;s merger or consolidation with or into, or sale of
    all or substantially all of its assets to, another person.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The removal of our general partner requires the approval of not
    less than
    66<FONT style="vertical-align: top; font-size: 70&#37;">2</FONT>/<FONT style="font-size: 70&#37;">3</FONT>%
    of all outstanding units, including units held by our general
    partner and its affiliates. Any removal is subject to the
    election of a successor general partner by the holders of a
    majority of the outstanding common units, including units held
    by our general partner and its affiliates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ETP
    Units</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Common Units.</I>&#160;&#160;As of June&#160;30, 2007, ETP
    had approximately 137.0&#160;million common units outstanding,
    of which approximately 74.5&#160;million were held by the public
    and approximately 62.5&#160;million were held by ETE or its
    affiliates. As of such date, the common units represent an
    aggregate 98.0% limited partner interest in ETP. ETP&#146;s
    general partner owns an aggregate 2.0% general partner interest
    in ETP. ETP&#146;s common units are registered under the
    Securities Exchange Act of 1934, as amended and are listed for
    trading on the NYSE. The common units are entitled to
    distributions of Available Cash as described in &#147;ETP&#146;s
    Cash Distribution Policy.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Class&#160;E Units.</I>&#160;&#160;8,853,832 class&#160;E
    units, all of which are held by our former general partner,
    Heritage Holdings. Heritage Holdings became our wholly-owned
    subsidiary in conjunction with the January 2004 Energy Transfer
    transactions. Class&#160;E units were converted from common
    units held by Heritage Holdings at that time. Class&#160;E units
    generally do not have voting rights; are entitled to aggregate
    distributions equal to a percentage of the total amount of cash
    distributed to all unitholders, up to a maximum of $1.41 per
    class&#160;E unit per year; and will be allocated 1% of any gain
    and an equivalent amount of any loss allocated to the common
    units in the event of a termination or liquidation of ETP.
    Because the owner of the class&#160;E units is our wholly-owned
    subsidiary, they are treated as treasury stock. Although
    distributions on the class&#160;E units will be available to us
    as the owner of Heritage Holdings, this amount will be reduced
    by the annual tax payments at corporate federal income tax rates
    that Heritage Holdings is required to pay with respect to
    distributions on the class&#160;E units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Amendments
    to ETP&#146;s Partnership Agreement</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Amendments to ETP&#146;s partnership agreement may be proposed
    only by ETP&#146;s general partner. Certain amendments require
    the approval of a majority of the outstanding common units,
    including common units owned by the general partner and its
    affiliates. Any amendment that materially and adversely affects
    the rights or preferences of any class of partnership interests
    in relation to other classes of partnership interests will
    require the approval of at least a majority of the class of
    limited partnership interests so affected. However, in some
    circumstances, more particularly described in ETP&#146;s
    partnership agreement, ETP&#146;s general partner may make
    amendments to ETP&#146;s partnership agreement without the
    approval of ETP&#146;s unitholders to reflect:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a change in ETP&#146;s name, the location of its principal place
    of business, its registered agent or its registered office;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the admission, substitution, withdrawal or removal of partners;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a change to qualify or continue ETP&#146;s qualification as a
    limited partnership or a partnership in which its limited
    partners have limited liability under the laws of any state or
    to ensure that neither ETP or HOLP will be treated as an
    association taxable as a corporation or otherwise taxed as an
    entity for federal income tax purposes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a change that does not adversely affect ETP&#146;s unitholders
    in any material respect;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a change to (i)&#160;satisfy any requirements, conditions or
    guidelines contained in any opinion, directive, order, ruling or
    regulation of any federal or state agency or judicial authority
    or contained in any
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    58
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
    federal or state statute, (ii)&#160;facilitate the trading of
    ETP&#146;s common units or comply with any rule, regulation,
    guideline or requirement of any national securities exchange on
    which its common units are or will be listed for trading,
    (iii)&#160;that is necessary or advisable in connection with
    action taken by ETP&#146;s general partner with respect to
    subdivision and combination of its securities or (iv)&#160;that
    is required to effect the intent expressed in ETP&#146;s
    partnership agreement;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a change in ETP&#146;s fiscal year or taxable year and any
    changes that are necessary or advisable as a result of a change
    in its fiscal year or taxable year;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an amendment that is necessary to prevent ETP, or its general
    partner or its general partner&#146;s directors, officers,
    trustees or agents from being subjected to the provisions of the
    Investment Company Act of 1940, as amended, the Investment
    Advisers Act of 1940, as amended, or &#147;plan asset&#148;
    regulations adopted under the Employee Retirement Income
    Security Act of 1974, as amended;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an amendment that is necessary or advisable in connection with
    the authorization or issuance of any class or series of
    ETP&#146;s securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any amendment expressly permitted in ETP&#146;s partnership
    agreement to be made by its general partner acting alone;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an amendment effected, necessitated or contemplated by a merger
    agreement approved in accordance with its partnership agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an amendment that is necessary or advisable to reflect, account
    for and deal with appropriately ETP&#146;s formation of, or
    investment in, any corporation, partnership, joint venture,
    limited liability company or other entity other than its
    operating partnership, in connection with its conduct of
    activities permitted by its partnership agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a merger or conveyance to effect a change in ETP&#146;s legal
    form;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any other amendments substantially similar to the foregoing.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Merger,
    Sale or Other Disposition of Assets</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s general partner is generally prohibited, without the
    prior approval of the holders of at least a majority of the
    outstanding common units (excluding common units held by the
    general partner and its affiliates), from causing ETP to, among
    other things, sell, exchange or otherwise dispose of all or
    substantially all of its assets in a single transaction or a
    series of related transactions or approving on behalf of ETP the
    sale, exchange or other disposition of all or substantially all
    of the assets of its operating partnership; provided that its
    general partner may mortgage, pledge, hypothecate or grant a
    security interest in all or substantially all of the assets of
    ETP or its operating partnership without such approval.
    ETP&#146;s general partner may also sell all or substantially
    all of ETP&#146;s assets or its operating partnership&#146;s
    assets pursuant to a foreclosure or other realization upon the
    foregoing encumbrances without such approval. Furthermore,
    provided that certain conditions are satisfied, the ETP&#146;s
    general partner may merge ETP or any member of its partnership
    group into, or convey some or all of the partnership
    group&#146;s assets to, a newly-formed entity if the sole
    purpose of such merger or conveyance is to effect a mere change
    in the legal form of ETP into another limited liability entity.
    ETP&#146;s unitholders are not entitled to dissenters&#146;
    rights of appraisal under the partnership agreement or
    applicable Delaware law in the event of a merger or
    consolidation of ETP, a sale of substantially all of ETP&#146;s
    assets or any other transaction or event.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    59
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Termination
    or Dissolution</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP will continue as a limited partnership until terminated
    under its partnership agreement. ETP will dissolve upon:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;the expiration of ETP&#146;s term under its partnership
    agreement;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;the election of ETP&#146;s general partner to dissolve
    ETP, if approved by the holders of a majority of ETP&#146;s
    outstanding common units, excluding those common units held by
    ETP&#146;s general partner and its affiliates;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;the sale, exchange or other disposition of all or
    substantially all of ETP assets and properties and those of its
    subsidiaries;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (4)&#160;the entry of a decree of judicial dissolution of
    ETP;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (5)&#160;the withdrawal or removal of ETP&#146;s general partner
    or any other event that results in its ceasing to be ETP&#146;s
    general partner other than by reason of a transfer of its
    general partner interest in accordance with ETP&#146;s
    partnership agreement or withdrawal or removal following
    approval and admission of a successor.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon a dissolution under clause&#160;(5) above, the holders of a
    majority of ETP&#146;s common outstanding units (excluding those
    common units held by ETP&#146;s general partner and its
    affiliates) may also elect, within specific time limitations, to
    reconstitute ETP and continue its business on the same terms and
    conditions described in its partnership agreement by forming a
    new limited partnership on terms identical to those in
    ETP&#146;s partnership agreement and having as general partner
    an entity approved by the holders of a majority of ETP&#146;s
    outstanding common units, excluding those common units held by
    ETP&#146;s general partner and its affiliates, subject to
    receipt by ETP of an opinion of counsel to the effect that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the action would not result in the loss of limited liability of
    any limited partner;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    none of the partnership, the reconstituted limited partnership,
    ETP&#146;s operating partnership nor any of its other
    subsidiaries would be treated as an association taxable as a
    corporation or otherwise be taxable as an entity for federal
    income tax purposes upon the exercise of that right to continue.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Liquidation
    and Distribution of Proceeds</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon ETP&#146;s dissolution, unless it is reconstituted and
    continued as a new limited partnership, the person authorized to
    wind up ETP&#146;s affairs (the liquidator) will, acting with
    all the powers of ETP&#146;s general partner that the liquidator
    deems necessary or desirable in its good faith judgment,
    liquidate ETP&#146;s assets. The proceeds of the liquidation
    will be applied as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>first</I>, towards the payment of all of ETP&#146;s creditors
    and the creation of a reserve for contingent
    liabilities;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>then</I>, to all partners in accordance with the positive
    balance in the respective capital accounts.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under some circumstances and subject to some limitations, the
    liquidator may defer liquidation or distribution of ETP&#146;s
    assets for a reasonable period of time. If the liquidator
    determines that a sale would be impractical or would cause a
    loss to ETP&#146;s partners, ETP&#146;s general partner may
    distribute assets in kind to ETP&#146;s partners.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Withdrawal
    or Removal of ETP&#146;s General Partner</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s general partner may withdraw as general partner
    without first obtaining approval of any unitholder by giving
    90&#160;days&#146; written notice, and that withdrawal will not
    constitute a violation of ETP&#146;s partnership agreement. In
    addition, ETP&#146;s general partner may withdraw without
    unitholder approval upon 90&#160;days&#146; notice to ETP&#146;s
    limited partners if at least 50% of ETP&#146;s outstanding
    common units are held or controlled by one person and its
    affiliates other than its general partner and its affiliates.
</DIV>

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    <BR>
    60
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon the voluntary withdrawal of ETP&#146;s general partner, the
    holders of a majority of ETP&#146;s outstanding common units,
    excluding the common units held by the withdrawing general
    partner and its affiliates, may elect a successor to the
    withdrawing general partner. If a successor is not elected, or
    is elected but an opinion of counsel regarding limited liability
    and tax matters cannot be obtained, ETP will be dissolved, wound
    up and liquidated, unless within 90&#160;days after that
    withdrawal, the holders of a majority of its outstanding units,
    excluding the common units held by the withdrawing general
    partner and its affiliates, agree to continue ETP&#146;s
    business and to appoint a successor general partner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s general partner may not be removed unless that
    removal is approved by the vote of the holders of not less than
    two-thirds of ETP&#146;s outstanding units, including units held
    by its general partner and its affiliates, and ETP receives an
    opinion of counsel regarding limited liability and tax matters.
    In addition, if ETP&#146;s general partner is removed as
    ETP&#146;s general partner under circumstances where cause does
    not exist, ETP&#146;s general partner will have the right to
    receive cash in exchange for its partnership interest as a
    general partner in ETP, its partnership interest as the general
    partner of any member of the Energy Transfer partnership group
    and its incentive distribution rights. Cause is narrowly defined
    to mean that a court of competent jurisdiction has entered a
    final, non-appealable judgment finding the general partner
    liable for actual fraud, gross negligence or willful or wanton
    misconduct in its capacity as ETP&#146;s general partner. Any
    removal of this kind is also subject to the approval of a
    successor general partner by the vote of the holders of a
    majority of ETP&#146;s outstanding common units, including those
    held by its general partner and its affiliates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    While ETP&#146;s partnership agreement limits the ability of
    ETP&#146;s general partner to withdraw, it allows the general
    partner interest to be transferred to an affiliate or to a third
    party in conjunction with a merger or sale of all or
    substantially all of the assets of ETP&#146;s general partner.
    In addition, ETP&#146;s partnership agreement expressly permits
    the sale, in whole or in part, of the ownership of ETP&#146;s
    general partner. ETP&#146;s general partner may also transfer,
    in whole or in part, the common units it owns.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transfer
    of General Partner Interests</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s general partner may transfer all or any part of its
    general partner interest in ETP or its operating partnership to
    another person without the approval of the holders of
    outstanding common units; provided that, in each case, such
    transferee assumes the rights and duties of the general partner
    to whose interest such transferee has succeeded, agrees to be
    bound by the provisions of the partnership agreement, furnishes
    an opinion of counsel regarding limited liability and tax
    matters and agrees to acquire all (or the appropriate portion
    thereof, as applicable) of the general partner&#146;s interest
    in each other member of ETP&#146;s partnership group and agrees
    to be bound by the provisions of the operating
    partnership&#146;s partnership agreement. The members of the
    general partner may also sell or transfer all or part of their
    interest in the general partner to an affiliate or a third party
    without the approval of the unitholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Change of
    Management Provisions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s partnership agreement contains the following specific
    provisions that are intended to discourage a person or group
    from attempting to remove ETP&#146;s general partner or
    otherwise change management:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any units held by a person that owns 20% or more of any class of
    ETP&#146;s units then outstanding, other than its general
    partner and its affiliates, cannot be voted on any
    matter;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the partnership agreement contains provisions limiting the
    ability of unitholders to call meetings or to acquire
    information about ETP&#146;s operations, as well as other
    provisions limiting the unitholders&#146; ability to influence
    the manner or direction of management.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Limited
    Call Right</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If at any time less than 20% of the outstanding common units of
    any class are held by persons other than ETP&#146;s general
    partner and its affiliates, its general partner will have the
    right to acquire all, but not less than all, of those common
    units at a price no less than their then-current market price.
    As a consequence, a
</DIV>

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    <BR>
    61
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    unitholder may be required to sell his common units at an
    undesirable time or price. ETP&#146;s general partner may assign
    this purchase right to any of its affiliates or ETP.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Reimbursement
    of Expenses</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s partnership agreement requires it to reimburse its
    general partner for all direct and indirect expenses it incurs
    or payments it makes on ETP&#146;s behalf and all other expenses
    allocable to ETP or otherwise reasonably incurred by its general
    partner in connection with operating ETP&#146;s business. These
    expenses include salary, bonus, incentive compensation and other
    amounts paid to persons who perform services for ETP or for its
    general partner in the discharge of its duties to ETP.
    ETP&#146;s general partner is entitled to determine the expenses
    that are allocable to ETP in any reasonable manner in its sole
    discretion.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Indemnification</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under its partnership agreement, in most circumstances, ETP will
    indemnify ETP&#146;s general partner, its general partner&#146;s
    affiliates and their officers and directors to the fullest
    extent permitted by law, from and against all losses, claims or
    damages any of them may suffer by reason of their status as
    general partner, officer or director, as long as the person
    seeking indemnity acted in good faith and in a manner believed
    to be in or not opposed to ETP&#146;s best interest. Any
    indemnification under these provisions will only be out of
    ETP&#146;s assets. ETP&#146;s general partner shall not be
    personally liable for, or have any obligation to contribute or
    loan funds or assets to ETP to enable ETP to effectuate any
    indemnification. ETP is authorized to purchase insurance against
    liabilities asserted against and expenses incurred by persons
    for its activities, regardless of whether it would have the
    power to indemnify the person against liabilities under its
    partnership agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Registration
    Rights</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under its partnership agreement, ETP has agreed to register for
    resale under the Securities Act and applicable state securities
    laws any common units or other partnership securities proposed
    to be sold by its general partner or any of its affiliates or
    their assignees if an exemption from the registration
    requirements is not otherwise available. ETP is obligated to pay
    all expenses incidental to the registration, excluding
    underwriting discounts and commissions.
</DIV>

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    <BR>
    62
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "MATERIAL TAX CONSEQUENCES" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='112'></A><B><FONT style="font-family: 'Times New Roman', Times">MATERIAL
    TAX CONSEQUENCES</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This section is a discussion of the material tax considerations
    that may be relevant to prospective unitholders who are
    individual citizens or residents of the United States and,
    unless otherwise noted in the following discussion, is the
    opinion of Vinson&#160;&#038; Elkins L.L.P., tax counsel to the
    general partner and us, insofar as it relates to legal
    conclusions with respect to matters of United States federal
    income tax law. This section is based upon current provisions of
    the Internal Revenue Code, existing and proposed regulations and
    current administrative rulings and court decisions, all of which
    are subject to change. Later changes in these authorities may
    cause the tax consequences to vary substantially from the
    consequences described below. Unless the context otherwise
    requires, references in this section to &#147;us&#148; or
    &#147;we&#148; are references to Energy Transfer Equity, L.P.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following discussion does not comment on all federal income
    tax matters affecting us or the unitholders. Moreover, the
    discussion focuses on unitholders who are individual citizens or
    residents of the United States and has only limited application
    to corporations, estates, trusts, nonresident aliens or other
    unitholders subject to specialized tax treatment, such as
    tax-exempt institutions, foreign persons, individual retirement
    accounts (IRAs), real estate investment trusts (REITs) or mutual
    funds. Accordingly, we urge each prospective unitholder to
    consult, and depend on, his own tax advisor in analyzing the
    federal, state, local and foreign tax consequences particular to
    him of the ownership or disposition of units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All statements as to matters of law and legal conclusions, but
    not as to factual matters, contained in this section, unless
    otherwise noted, are the opinion of Vinson&#160;&#038; Elkins
    L.L.P. and are based on the accuracy of the representations made
    by us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No ruling has been or will be requested from the IRS regarding
    any matter affecting us or prospective unitholders. Instead, we
    will rely on opinions of Vinson&#160;&#038; Elkins L.L.P. Unlike
    a ruling, an opinion of counsel represents only that
    counsel&#146;s best legal judgment and does not bind the IRS or
    the courts. Accordingly, the opinions and statements made herein
    may not be sustained by a court if contested by the IRS. Any
    contest of this sort with the IRS may materially and adversely
    impact the market for the units and the prices at which units
    trade. In addition, the costs of any contest with the IRS,
    principally legal, accounting and related fees, will result in a
    reduction in cash available for distribution to our unitholders
    and our general partner and thus will be borne indirectly by our
    unitholders and our general partner. Furthermore, the tax
    treatment of us, or of an investment in us, may be significantly
    modified by future legislative or administrative changes or
    court decisions. Any modifications may or may not be
    retroactively applied.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the reasons described below, Vinson&#160;&#038; Elkins
    L.L.P. has not rendered an opinion with respect to the following
    specific federal income tax issues: (1)&#160;the treatment of a
    unitholder whose units are loaned to a short seller to cover a
    short sale of units (please read &#147;&#151; Tax Consequences
    of Unit Ownership&#160;&#151; Treatment of Short Sales&#148;);
    (2)&#160;whether our monthly convention for allocating taxable
    income and losses is permitted by existing Treasury Regulations
    (please read &#147;&#151; Disposition of Units&#160;&#151;
    Allocations Between Transferors and Transferees&#148;); and
    (3)&#160;whether our method for depreciating Section&#160;743
    adjustments is sustainable in certain cases (please read
    &#147;&#151; Tax Consequences of Unit Ownership&#160;&#151;
    Section&#160;754 Election&#148;).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Partnership
    Status</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A partnership is not a taxable entity and incurs no federal
    income tax liability. Instead, each partner of a partnership is
    required to take into account his share of items of income,
    gain, loss and deduction of the partnership in computing his
    federal income tax liability, regardless of whether cash
    distributions are made to him by the partnership. Distributions
    by a partnership to a partner are generally not taxable unless
    the amount of cash distributed is in excess of the
    partner&#146;s adjusted basis in his partnership interest.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;7704 of the Internal Revenue Code provides that
    publicly traded partnerships will, as a general rule, be taxed
    as corporations. However, an exception, referred to as the
    &#147;Qualifying Income Exception,&#148; exists with respect to
    publicly traded partnerships of which 90% or more of the gross
    income for every taxable year consists of &#147;qualifying
    income.&#148; Qualifying income includes income and gains
    derived from the transportation, storage and processing of crude
    oil, natural gas and products thereof, the retail and wholesale
    marketing of propane, the transportation of propane and natural
    gas liquids, certain related hedging activities, and our
</DIV>

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    <BR>
    63
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    allocable share of income ETP&#146;s income from these sources.
    Other types of qualifying income include interest (other than
    from a financial business), dividends, gains from the sale of
    real property and gains from the sale or other disposition of
    capital assets held for the production of income that otherwise
    constitutes qualifying income. We estimate that less than 6% of
    our current gross income is not qualifying income; however, this
    estimate could change from time to time. Based upon and subject
    to this estimate, the factual representations made by us and our
    general partner and a review of the applicable legal
    authorities, Vinson&#160;&#038; Elkins L.L.P. is of the opinion
    that at least 90% of our current gross income constitutes
    qualifying income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No ruling has been or will be sought from the IRS and the IRS
    has made no determination as to our status for federal income
    tax purposes or whether our operations generate &#147;qualifying
    income&#148; under Section&#160;7704 of the Internal Revenue
    Code. Moreover, no ruling has been or will be sought from the
    IRS and the IRS has made no determination as to ETP&#146;s
    status for federal income tax purposes or whether its operations
    generate &#147;qualifying income&#148; under Section&#160;7704
    of the Internal Revenue Code. Instead, we will rely on the
    opinion of Vinson&#160;&#038; Elkins L.L.P. on such matters. It
    is the opinion of Vinson&#160;&#038; Elkins L.L.P. that, based
    upon the Internal Revenue Code, its regulations, published
    revenue rulings and court decisions and the representations
    described below, we will be classified as a partnership.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In rendering its opinion, Vinson&#160;&#038; Elkins L.L.P. has
    relied on factual representations made by us and our general
    partner. The representations made by us and our general partner
    upon which Vinson&#160;&#038; Elkins L.L.P. has relied are:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Neither we nor ETP has elected or will elect to be treated as a
    corporation;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    For each taxable year, more than 90% of our gross income has
    been and will be income that Vinson&#160;&#038; Elkins L.L.P.
    has opined or will opine is &#147;qualifying income&#148; within
    the meaning of Section&#160;7704(d) of the Internal Revenue Code.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we fail to meet the Qualifying Income Exception, other than a
    failure that is determined by the IRS to be inadvertent and that
    is cured within a reasonable time after discovery, in which
    case, the IRS may also require us to make adjustments with
    respect to our unitholders or pay other amounts, we will be
    treated as if we had transferred all of our assets, subject to
    liabilities, to a newly formed corporation, on the first day of
    the year in which we fail to meet the Qualifying Income
    Exception, in return for stock in that corporation, and then
    distributed that stock to the unitholders in liquidation of
    their interests in us. This deemed contribution and liquidation
    should be tax-free to unitholders and us so long as we, at that
    time, do not have liabilities in excess of the tax basis of our
    assets. Thereafter, we would be treated as a corporation for
    federal income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we were taxable as a corporation in any taxable year, either
    as a result of a failure to meet the Qualifying Income Exception
    or otherwise, our items of income, gain, loss and deduction
    would be reflected only on our tax return rather than being
    passed through to the unitholders, and our net income would be
    taxed to us at corporate rates. Moreover, if ETP were taxable as
    a corporation in any taxable year, our share of ETP&#146;s items
    of income, gain, loss and deduction would not be passed through
    to us and ETP would pay tax on its income at corporate rates. If
    we or ETP were taxable as corporations, losses recognized by ETP
    would not flow through to us or our losses would not flow
    through to our unitholders, as the case may be. In addition, any
    distribution made by us to a unitholder (or by ETP to us) would
    be treated as either taxable dividend income, to the extent of
    current or accumulated earnings and profits, or, in the absence
    of earnings and profits, a nontaxable return of capital, to the
    extent of the unitholder&#146;s tax basis in his units (or our
    tax basis in our interest in ETP), or taxable capital gain,
    after the unitholder&#146;s tax basis in his units (or our tax
    basis in our interest in ETP) is reduced to zero. Accordingly,
    taxation of either us or ETP as a corporation would result in a
    material reduction in a unitholder&#146;s cash flow and
    after-tax return and thus would likely result in a substantial
    reduction of the value of the units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The discussion below is based on Vinson&#160;&#038; Elkins
    L.L.P.&#146;s opinion that we and ETP will be classified as
    partnerships for federal income tax purposes.
</DIV>

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    <BR>
    64
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Limited
    Partner Status</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unitholders who have become limited partners of us will be
    treated as partners in us for federal income tax purposes. Also:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    assignees who have executed and delivered transfer applications,
    and are awaiting admission as limited partners;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    unitholders whose units are held in street name or by a nominee
    and who have the right to direct the nominee in the exercise of
    all substantive rights attendant to the ownership of their units
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    will be treated as partners for federal income tax purposes. As
    there is no direct or indirect controlling authority addressing
    assignees of units who are entitled to execute and deliver
    transfer applications and thereby become entitled to direct the
    exercise of attendant rights, but who fail to execute and
    deliver transfer applications, Vinson&#160;&#038; Elkins
    L.L.P.&#146;s opinion does not extend to these persons.
    Furthermore, a purchaser or other transferee of units who does
    not execute and deliver a transfer application may not receive
    some federal income tax information or reports furnished to
    record holders of units unless the units are held in a nominee
    or street name account and the nominee or broker has executed
    and delivered a transfer application for those units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A beneficial owner of units whose units have been transferred to
    a short seller to complete a short sale would appear to lose his
    status as a partner with respect to those units for federal
    income tax purposes. Please read &#147;&#151; Tax Consequences
    of Unit Ownership&#160;&#151; Treatment of Short Sales.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Income, gains, deductions or losses would not appear to be
    reportable by a unitholder who is not a partner for federal
    income tax purposes, and any cash distributions received by a
    unitholder who is not a partner for federal income tax purposes
    would therefore appear to be fully taxable as ordinary income.
    These holders are urged to consult their own tax advisors with
    respect to their status as partners in us for federal income tax
    purposes.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax
    Consequences of Unit Ownership</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Flow-Through of Taxable Income.</I>&#160;&#160;We will not
    pay any federal income tax. Instead, each unitholder will be
    required to report on his income tax return his share of our
    income, gains, losses and deductions without regard to whether
    corresponding cash distributions are received by him.
    Consequently, we may allocate income to a unitholder even if he
    has not received a cash distribution. Each unitholder will be
    required to include in income his allocable share of our income,
    gains, losses and deductions for our taxable year ending with or
    within his taxable year. Our taxable year ends on
    December&#160;31.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Treatment of Distributions.</I>&#160;&#160;Distributions by
    us to a unitholder generally will not be taxable to the
    unitholder for federal income tax purposes, except to the extent
    the amount of any such cash distribution exceeds his tax basis
    in his units immediately before the distribution. Our cash
    distributions in excess of a unitholder&#146;s tax basis
    generally will be considered to be gain from the sale or
    exchange of the units, taxable in accordance with the rules
    described under &#145;&#145;&#151; Disposition of Units&#148;
    below. Any reduction in a unitholder&#146;s share of our
    liabilities for which no partner, including the general partner,
    bears the economic risk of loss, known as &#147;nonrecourse
    liabilities,&#148; will be treated as a distribution of cash to
    that unitholder. To the extent our distributions cause a
    unitholder&#146;s &#147;at risk&#148; amount to be less than
    zero at the end of any taxable year, he must recapture any
    losses deducted in previous years. Please read
    &#145;&#145;&#151; Limitations on Deductibility of Losses.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A decrease in a unitholder&#146;s percentage interest in us
    because of our issuance of additional units will decrease his
    share of our nonrecourse liabilities, and thus will result in a
    corresponding deemed distribution of cash. A non-pro rata
    distribution of money or property may result in ordinary income
    to a unitholder, regardless of his tax basis in his units, if
    the distribution reduces the unitholder&#146;s share of our
    &#147;unrealized receivables,&#148; including depreciation
    recapture,
    <FONT style="white-space: nowrap">and/or</FONT>
    substantially appreciated &#147;inventory items,&#148; both as
    defined in the Internal Revenue Code, and collectively,
    &#147;Section&#160;751 Assets.&#148; To that extent, he will be
    treated as having been distributed his proportionate share of
    the Section&#160;751 Assets and having exchanged those assets
    with us in return for the non-pro rata portion of the actual
    distribution made to him. This latter deemed
</DIV>

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    <BR>
    65
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    exchange will generally result in the unitholder&#146;s
    realization of ordinary income, which will equal the excess of
    (1)&#160;the non-pro rata portion of that distribution over
    (2)&#160;the unitholder&#146;s tax basis for the share of
    Section&#160;751 Assets deemed relinquished in the exchange.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Basis of Units.</I>&#160;&#160;A unitholder&#146;s initial
    tax basis for his units will be the amount he paid for the units
    plus his share of our nonrecourse liabilities. That basis will
    be increased by his share of our income and by any increases in
    his share of our nonrecourse liabilities. That basis will be
    decreased, but not below zero, by distributions from us, by the
    unitholder&#146;s share of our losses, by any decreases in his
    share of our nonrecourse liabilities and by his share of our
    expenditures that are not deductible in computing taxable income
    and are not required to be capitalized. A unitholder will have
    no share of our debt that is recourse to the general partner,
    but will have a share, generally based on his share of profits,
    of our nonrecourse liabilities. Please read &#147;&#151;
    Disposition of Units&#160;&#151; Recognition of Gain or
    Loss.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Limitations on Deductibility of Losses.</I>&#160;&#160;The
    deduction by a unitholder of his share of our losses will be
    limited to the tax basis in his units and, in the case of an
    individual unitholder or a corporate unitholder, if more than
    50% of the value of the corporate unitholder&#146;s stock is
    owned directly or indirectly by or for five or fewer individuals
    or some tax-exempt organizations, to the amount for which the
    unitholder is considered to be &#147;at risk&#148; with respect
    to our activities, if that is less than his tax basis. A
    unitholder subject to these limitations must recapture losses
    deducted in previous years to the extent that distributions
    cause his at risk amount to be less than zero at the end of any
    taxable year. Losses disallowed to a unitholder or recaptured as
    a result of these limitations will carry forward and will be
    allowable to the extent that his tax basis or at risk amount,
    whichever is the limiting factor, is subsequently increased.
    Upon the taxable disposition of a unit, any gain recognized by a
    unitholder can be offset by losses that were previously
    suspended by the at risk limitation but may not be offset by
    losses suspended by the basis limitation. Any loss previously
    suspended by the at risk limitation in excess of that gain would
    no longer be utilizable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, a unitholder will be at risk to the extent of the
    tax basis of his units, excluding any portion of that basis
    attributable to his share of our nonrecourse liabilities,
    reduced by (i)&#160;any portion of that basis representing
    amounts otherwise protected against loss because of a guarantee,
    stop loss agreement or other similar arrangement and
    (ii)&#160;any amount of money he borrows to acquire or hold his
    units, if the lender of those borrowed funds owns an interest in
    us, is related to the unitholder or can look only to the units
    for repayment. A unitholder&#146;s at risk amount will increase
    or decrease as the tax basis of the unitholder&#146;s units
    increases or decreases, other than tax basis increases or
    decreases attributable to increases or decreases in his share of
    our nonrecourse liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the basis and at-risk limitations on the
    deductibility of losses, the passive loss limitations generally
    provide that individuals, estates, trusts and some closely-held
    corporations and personal service corporations can deduct losses
    from passive activities, which are generally trade or business
    activities in which the taxpayer does not materially
    participate, only to the extent of the taxpayer&#146;s income
    from those passive activities. The passive loss limitations are
    applied separately with respect to each publicly traded
    partnership. However, the application of the passive loss
    limitations to tiered publicly traded partnerships is uncertain.
    We will take the position that any passive losses we generate
    that are reasonably allocable to our investment in ETP will only
    be available to offset our passive income generated in the
    future that is reasonably allocable to our investment in ETP and
    will not be available to offset income from other passive
    activities or investments, including other investments in
    private businesses or investments we may make in other publicly
    traded partnerships. Moreover, because the passive loss
    limitations are applied separately with respect to each publicly
    traded partnership, any passive losses we generate will not be
    available to offset your income from other passive activities or
    investments, including your investments in other publicly traded
    partnerships, such as ETP, or salary or active business income.
    Further, your share of our net income may be offset by any
    suspended passive losses from your investment in us, but may not
    be offset by your current or carryover losses from other passive
    activities, including those attributable to other publicly
    traded partnerships. Passive losses that are not deductible
    because they exceed a unitholder&#146;s share of income we
    generate may be deducted in full when he disposes of his entire
    investment in us in a fully taxable transaction with an
    unrelated party.
</DIV>

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    <BR>
    66
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The IRS could take the position that for purposes of applying
    the passive loss limitation rules to tiered publicly traded
    partnerships, such as ETP and us, the related entities are
    treated as one publicly traded partnership. In that case, any
    passive losses we generate would be available to offset income
    from your investments in ETP. However, passive losses that are
    not deductible because they exceed a unitholder&#146;s share of
    income we generate would not be deductible in full until a
    unitholder disposes of his entire investment in both us and ETP
    in a fully taxable transaction with an unrelated party.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The passive loss limitations are applied after other applicable
    limitations on deductions, including the at risk rules and the
    basis limitation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Limitations on Interest Deductions.</I>&#160;&#160;The
    deductibility of a non-corporate taxpayer&#146;s
    &#147;investment interest expense&#148; is generally limited to
    the amount of that taxpayer&#146;s &#147;net investment
    income.&#148; Investment interest expense includes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    interest on indebtedness properly allocable to property held for
    investment;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our interest expense attributed to portfolio income;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the portion of interest expense incurred to purchase or carry an
    interest in a passive activity to the extent attributable to
    portfolio income.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The computation of a unitholder&#146;s investment interest
    expense will take into account interest on any margin account
    borrowing or other loan incurred to purchase or carry a unit.
    Net investment income includes gross income from property held
    for investment and amounts treated as portfolio income under the
    passive loss rules, less deductible expenses, other than
    interest, directly connected with the production of investment
    income, but generally does not include gains attributable to the
    disposition of property held for investment. The IRS has
    indicated that net passive income earned by a publicly traded
    partnership will be treated as investment income to its
    unitholders. In addition, the unitholder&#146;s share of our
    portfolio income will be treated as investment income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Entity-Level&#160;Collections.</I>&#160;&#160;If we are
    required or elect under applicable law to pay any federal,
    state, local or foreign income tax on behalf of any unitholder
    or the general partner or any former unitholder, we are
    authorized to pay those taxes from our funds. That payment, if
    made, will be treated as a distribution of cash to the partner
    on whose behalf the payment was made. If the payment is made on
    behalf of a person whose identity cannot be determined, we are
    authorized to treat the payment as a distribution to all current
    unitholders. We are authorized to amend the partnership
    agreement in the manner necessary to maintain uniformity of
    intrinsic tax characteristics of units and to adjust later
    distributions, so that after giving effect to these
    distributions, the priority and characterization of
    distributions otherwise applicable under the partnership
    agreement is maintained as nearly as is practicable. Payments by
    us as described above could give rise to an overpayment of tax
    on behalf of an individual partner in which event the partner
    would be required to file a claim in order to obtain a credit or
    refund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Allocation of Income, Gain, Loss and
    Deduction.</I>&#160;&#160;In general, if we have a net profit,
    our items of income, gain, loss and deduction will be allocated
    among the unitholders and our General Partner in accordance with
    their percentage interests in us. If we have a net loss for the
    entire year, that loss will be allocated first to our general
    partner and the unitholders in accordance with their percentage
    interests in us to the extent of their positive capital accounts
    and, second, to our general partner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Specified items of our income, gain, loss and deduction will be
    allocated to account for the difference between the tax basis
    and fair market value of our assets at the time of an offering,
    referred to in this discussion as &#147;Contributed
    Property.&#148; The effect of these allocations, referred to as
    &#147;Section&#160;704(c) allocations,&#148; to a unitholder
    purchasing units in this offering will be essentially the same
    as if the tax basis of our assets were equal to their fair
    market value at the time of this offering. In the event we issue
    additional common units or engage in certain other transactions
    in the future &#147;reverse Section&#160;704(c)
    allocations,&#148; similar to the Section&#160;704(c)
    allocations described above, will be made to all holders of
    partnership interests, including purchasers of common units in
    this offering, to account for the difference between the
    &#147;book&#148; basis for purposes of maintaining capital
    accounts and the fair market value of all property held by us at
    the time of
</DIV>

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    <BR>
    67
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the future transaction. In addition, items of recapture income
    will be allocated to the extent possible to the partner who was
    allocated the deduction giving rise to the treatment of that
    gain as recapture income in order to minimize the recognition of
    ordinary income by some unitholders. Finally, although ETP does
    not expect that our operations will result in the creation of
    negative capital accounts, if negative capital accounts
    nevertheless result, items of our income and gain will be
    allocated in an amount and manner to eliminate the negative
    balance as quickly as possible.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An allocation of items of our income, gain, loss or deduction,
    other than an allocation required by the Internal Revenue Code
    to eliminate the difference between a partner&#146;s
    &#147;book&#148; capital account, credited with the fair market
    value of Contributed Property, and &#147;tax&#148; capital
    account, credited with the tax basis of Contributed Property,
    referred to in this discussion as the &#147;Book-Tax
    Disparity,&#148; will generally be given effect for federal
    income tax purposes in determining a partner&#146;s share of an
    item of income, gain, loss or deduction only if the allocation
    has substantial economic effect. In any other case, a
    partner&#146;s share of an item will be determined on the basis
    of his interest in us, which will be determined by taking into
    account all the facts and circumstances, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    his relative contributions to us;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the interests of all the partners in profits and losses;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the interest of all the partners in cash flow;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the rights of all the partners to distributions of capital upon
    liquidation.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Vinson&#160;&#038; Elkins L.L.P. is of the opinion that, with
    the exception of the issues described in
    &#147;&#151;&#160;Section&#160;754 Election&#148; and
    &#147;&#151; Disposition of Units&#160;&#151; Allocations
    Between Transferors and Transferees,&#148; allocations under our
    partnership agreement will be given effect for federal income
    tax purposes in determining a partner&#146;s share of an item of
    income, gain, loss or deduction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Treatment of Short Sales.</I>&#160;&#160;A unitholder whose
    units are loaned to a &#147;short seller&#148; to cover a short
    sale of units may be considered as having disposed of those
    units. If so, he would no longer be treated for tax purposes as
    a partner with respect to those units during the period of the
    loan and may recognize gain or loss from the disposition. As a
    result, during this period:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any of our income, gain, loss or deduction with respect to those
    units would not be reportable by the unitholder;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any cash distributions received by the unitholder as to those
    units would be fully taxable;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all of these distributions would appear to be ordinary income.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Vinson&#160;&#038; Elkins L.L.P. has not rendered an opinion
    regarding the treatment of a unitholder where units are loaned
    to a short seller to cover a short sale of units; therefore,
    unitholders desiring to assure their status as partners and
    avoid the risk of gain recognition from a loan to a short seller
    are urged to modify any applicable brokerage account agreements
    to prohibit their brokers from borrowing their units. The IRS
    has announced that it is actively studying issues relating to
    the tax treatment of short sales of partnership interests.
    Please also read &#147;&#151; Disposition of Units&#160;&#151;
    Recognition of Gain or Loss.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Alternative Minimum Tax.</I>&#160;&#160;Each unitholder will
    be required to take into account his distributive share of any
    items of our income, gain, loss or deduction for purposes of the
    alternative minimum tax. The current minimum tax rate for
    noncorporate taxpayers is 26% on the first $175,000 of
    alternative minimum taxable income in excess of the exemption
    amount and 28% on any additional alternative minimum taxable
    income. Prospective unitholders are urged to consult with their
    tax advisors as to the impact of an investment in units on their
    liability for the alternative minimum tax.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Tax Rates.</I>&#160;&#160;In general, the highest effective
    United States federal income tax rate for individuals is
    currently 35.0% and the maximum United States federal income tax
    rate for net capital gains of an individual the asset disposed
    of was held for more than twelve months at the time of
    disposition is scheduled to remain at 15.0% for years 2008
    through 2010 and then increase to 20% beginning January&#160;1,
    2011.
</DIV>

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    <BR>
    68
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Section&#160;754 Election.</I>&#160;&#160;We have made the
    election permitted by Section&#160;754 of the Internal Revenue
    Code. That election is irrevocable without the consent of the
    IRS. The election will generally permit us to adjust a unit
    purchaser&#146;s tax basis in our assets (&#147;inside
    basis&#148;) under Section&#160;743(b) of the Internal Revenue
    Code to reflect his purchase price. This election does not apply
    to a person who purchases units directly from us. The
    Section&#160;743(b) adjustment belongs to the purchaser and not
    to other unitholders. For purposes of this discussion, a
    unitholder&#146;s inside basis in our assets will be considered
    to have two components: (1)&#160;his share of our tax basis in
    our assets (&#147;common basis&#148;) and (2)&#160;his
    Section&#160;743(b) adjustment to that basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Where the remedial allocation method is adopted (which we have
    historically adopted as to all property other than certain
    goodwill properties and which we will generally adopt as to all
    properties going forward), the Treasury Regulations under
    Section&#160;743 of the Internal Revenue Code require a portion
    of the Section&#160;743(b) adjustment that is attributable to
    recovery property under Section&#160;168 of the Internal Revenue
    Code to be depreciated over the remaining cost recovery period
    for the Section&#160;704(c) built-in gain. If we elect a method
    other than the remedial method with respect to a goodwill
    property, Treasury
    <FONT style="white-space: nowrap">Regulation&#160;Section&#160;1.197-2(g)(3)</FONT>
    generally requires that the Section&#160;743(b) adjustment
    attributable to an amortizable Section&#160;197 intangible,
    which includes goodwill properties, should be treated as a
    newly-acquired asset placed in service in the month when the
    purchaser acquires the common unit. Under Treasury
    <FONT style="white-space: nowrap">Regulation&#160;Section&#160;1.167(c)-1(a)(6),</FONT>
    a Section&#160;743(b) adjustment attributable to property
    subject to depreciation under Section&#160;167 of the Internal
    Revenue Code, rather than cost recovery deductions under
    Section&#160;168, is generally required to be depreciated using
    either the straight-line method or the 150% declining balance
    method. If we elect a method other than the remedial method, the
    depreciation and amortization methods and useful lives
    associated with the Section&#160;743(b) adjustment, therefore,
    may differ from the methods and useful lives generally used to
    depreciate the inside basis in such properties. Under our
    partnership agreement, our general partner is authorized to take
    a position to preserve the uniformity of units even if that
    position is not consistent with these and any other Treasury
    Regulations. If we elect a method other than the remedial method
    with respect to a goodwill property, the common basis of such
    property is not amortizable. Please read &#147;&#151;
    Uniformity of Units.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although Vinson&#160;&#038; Elkins L.L.P. is unable to opine as
    to the validity of this approach because there is no direct or
    indirect controlling authority on this issue, we intend to
    depreciate the portion of a Section&#160;743(b) adjustment
    attributable to unrealized appreciation in the value of
    Contributed Property, to the extent of any unamortized Book-Tax
    Disparity, using a rate of depreciation or amortization derived
    from the depreciation or amortization method and useful life
    applied to the unamortized Book-Tax Disparity of the property,
    or treat that portion as
    <FONT style="white-space: nowrap">non-amortizable</FONT>
    to the extent attributable to property which is not amortizable.
    This method is consistent with the methods employed by other
    publicly traded partnerships but is arguably inconsistent with
    Treasury
    <FONT style="white-space: nowrap">Regulation&#160;Section&#160;1.167(c)-1(a)(6),</FONT>
    which is not expected to directly apply to a material portion of
    our assets, and Treasury
    <FONT style="white-space: nowrap">Regulation&#160;Section&#160;1.197-2(g)(3).</FONT>
    To the extent this Section&#160;743(b) adjustment is
    attributable to appreciation in value in excess of the
    unamortized Book-Tax Disparity, we will apply the rules
    described in the Treasury Regulations and legislative history.
    If we determine that this position cannot reasonably be taken,
    we may take a depreciation or amortization position under which
    all purchasers acquiring units in the same month would receive
    depreciation or amortization, whether attributable to common
    basis or a Section&#160;743(b) adjustment, based upon the same
    applicable rate as if they had purchased a direct interest in
    our assets. This kind of aggregate approach may result in lower
    annual depreciation or amortization deductions than would
    otherwise be allowable to some unitholders. Please read
    &#147;&#151;  Uniformity of Units.&#148; A unitholder&#146;s tax
    basis for his common units is reduced by his share of our
    deductions (whether or not such deductions were claimed on an
    individual&#146;s income tax return) so that any position we
    take that understates deductions will overstate the common
    unitholder&#146;s basis in his common units, which may cause the
    unitholder to understate gain or overstate loss on any sale of
    such units. Please read &#147;&#151;  Disposition of Common
    Units&#160;&#151; Recognition of Gain or Loss.&#148; The IRS may
    challenge our position with respect to depreciating or
    amortizing the Section&#160;743(b) adjustment we take to
    preserve the uniformity of the units. If such a challenge were
    sustained, the gain from the sale of units might be increased
    without the benefit of additional deductions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A Section&#160;754 election is advantageous if the
    transferee&#146;s tax basis in his units is higher than the
    units&#146; share of the aggregate tax basis of our assets
    immediately prior to the transfer. In that case, as a result of
    the election, the transferee would have, among other items, a
    greater amount of depreciation and depletion
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    69
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    deductions and his share of any gain or loss on a sale of our
    assets would be less. Conversely, a Section&#160;754 election is
    disadvantageous if the transferee&#146;s tax basis in his units
    is lower than those units&#146; share of the aggregate tax basis
    of our assets immediately prior to the transfer. Thus, the fair
    market value of the units may be affected either favorably or
    unfavorably by the election. A basis adjustment is required
    regardless of whether a Section&#160;754 election is made in the
    case of a transfer of an interest in us if we have a substantial
    built-in loss immediately after the transfer, or if we
    distribute property and have a substantial basis reduction.
    Generally a built-in loss or a basis reduction is substantial if
    it exceeds $250,000.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The calculations involved in the Section&#160;754 election are
    complex and will be made on the basis of assumptions as to the
    value of our assets and other matters. For example, the
    allocation of the Section&#160;743(b) adjustment among our
    assets must be made in accordance with the Internal Revenue
    Code. The IRS could seek to reallocate some or all of any
    Section&#160;743(b) adjustment allocated by us to our tangible
    assets or the tangible assets owned by ETP to goodwill instead.
    Goodwill, as an intangible asset, is generally nonamortizable or
    amortizable over a longer period of time or under a less
    accelerated method than our tangible assets. We cannot assure
    you that the determinations we make will not be successfully
    challenged by the IRS and that the deductions resulting from
    them will not be reduced or disallowed altogether. Should the
    IRS require a different basis adjustment to be made, and should,
    in our opinion, the expense of compliance exceed the benefit of
    the election, we may seek permission from the IRS to revoke our
    Section&#160;754 election. If permission is granted, a
    subsequent purchaser of units may be allocated more income than
    he would have been allocated had the election not been revoked.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax
    Treatment of Operations</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Accounting Method and Taxable Year.</I>&#160;&#160;We use the
    year ending December 31 as our taxable year and the accrual
    method of accounting for federal income tax purposes. Each
    unitholder will be required to include in income his share of
    our income, gain, loss and deduction for our taxable year ending
    within or with his taxable year. In addition, a unitholder who
    has a taxable year ending on a date other than December 31 and
    who disposes of all of his units following the close of our
    taxable year but before the close of his taxable year must
    include his share of our income, gain, loss and deduction in
    income for his taxable year, with the result that he will be
    required to include in income for his taxable year his share of
    more than one year of our income, gain, loss and deduction.
    Please read &#147;&#151; Disposition of Units&#160;&#151;
    Allocations Between Transferors and Transferees.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Tax Basis, Depreciation and Amortization.</I>&#160;&#160;The
    tax basis of our assets and ETP&#146;s assets will be used for
    purposes of computing depreciation and cost recovery deductions
    and, ultimately, gain or loss on the disposition of these
    assets. The federal income tax burden associated with the
    difference between the fair market value of our assets and their
    tax basis immediately prior to this offering will be borne by
    the unitholders immediately prior to this offering. Please read
    &#147;&#151; Tax Consequences of Unit Ownership&#160;&#151;
    Allocation of Income, Gain, Loss and Deduction.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent allowable, we may elect to use the depreciation
    and cost recovery methods that will result in the largest
    deductions being taken in the early years after assets subject
    to these allowances are placed in service. Because our general
    partner may determine not to adopt the remedial method of
    allocation with respect to any difference between the tax basis
    and the fair market value of goodwill immediately prior to this
    or any future offering, we may not be entitled to any
    amortization deductions with respect to any goodwill properties
    conveyed to us on formation or held by us at the time of any
    future offering. Please read &#147;&#151;  Uniformity of
    Units.&#148; Property we subsequently acquire or construct may
    be depreciated using accelerated methods permitted by the
    Internal Revenue Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we or ETP dispose of depreciable property by sale,
    foreclosure or otherwise, all or a portion of any gain,
    determined by reference to the amount of depreciation previously
    deducted and the nature of the property, may be subject to the
    recapture rules and taxed as ordinary income rather than capital
    gain. Similarly, a unitholder who has taken cost recovery or
    depreciation deductions with respect to property we own or ETP
    owns will likely be required to recapture some or all of those
    deductions as ordinary income upon a sale of his interest in us.
    Please read &#147;&#151; Tax Consequences of Unit
    Ownership&#160;&#151; Allocation of Income, Gain, Loss and
    Deduction&#148; and &#147;&#151; Disposition of
    Units&#160;&#151; Recognition of Gain or Loss.&#148;
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    70
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The costs incurred in selling our units (called
    &#147;syndication expenses&#148;) must be capitalized and cannot
    be deducted currently, ratably or upon our termination. There
    are uncertainties regarding the classification of costs as
    organization expenses, which may be amortized by us, and as
    syndication expenses, which may not be amortized by us. The
    underwriting discounts and commissions we incur will be treated
    as syndication expenses.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Valuation and Tax Basis of Our Properties.</I>&#160;&#160;The
    federal income tax consequences of the ownership and disposition
    of units will depend in part on our estimates of the relative
    fair market values, and the tax bases, of our assets and
    ETP&#146;s assets. Although we may from time to time consult
    with professional appraisers regarding valuation matters, we
    will make many of the relative fair market value estimates
    ourselves. These estimates and determinations of basis are
    subject to challenge and will not be binding on the IRS or the
    courts. If the estimates of fair market value or basis are later
    found to be incorrect, the character and amount of items of
    income, gain, loss or deductions previously reported by
    unitholders might change, and unitholders might be required to
    adjust their tax liability for prior years and incur interest
    and penalties with respect to those adjustments.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Disposition
    of Units</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Recognition of Gain or Loss.</I>&#160;&#160;Gain or loss will
    be recognized on a sale of units equal to the difference between
    the amount realized and the unitholder&#146;s tax basis for the
    units sold. A unitholder&#146;s amount realized will be measured
    by the sum of the cash or the fair market value of other
    property received by him plus his share of our nonrecourse
    liabilities. Because the amount realized includes a
    unitholder&#146;s share of our nonrecourse liabilities, the gain
    recognized on the sale of units could result in a tax liability
    in excess of any cash received from the sale.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior distributions from us in excess of cumulative net taxable
    income for a unit that decreased a unitholder&#146;s tax basis
    in that unit will, in effect, become taxable income if the unit
    is sold at a price greater than the unitholder&#146;s tax basis
    in that unit, even if the price received is less than his
    original cost.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as noted below, gain or loss recognized by a unitholder,
    other than a &#147;dealer&#148; in units, on the sale or
    exchange of a unit held for more than one year will generally be
    taxable as capital gain or loss. Capital gain recognized by an
    individual on the sale of units held more than twelve months
    will generally be taxed at a maximum rate of 15%. However, a
    portion, which will likely be substantial, of this gain or loss
    will be separately computed and taxed as ordinary income or loss
    under Section&#160;751 of the Internal Revenue Code to the
    extent attributable to assets giving rise to depreciation
    recapture or other &#147;unrealized receivables&#148; or to
    &#147;inventory items&#148; we own or ETP owns. The term
    &#147;unrealized receivables&#148; includes potential recapture
    items, including depreciation recapture. Ordinary income
    attributable to unrealized receivables, inventory items and
    depreciation recapture may exceed net taxable gain realized upon
    the sale of a unit and may be recognized even if there is a net
    taxable loss realized on the sale of a unit. Thus, a unitholder
    may recognize both ordinary income and a capital loss upon a
    sale of units. Net capital losses may offset capital gains and
    no more than $3,000 of ordinary income, in the case of
    individuals, and may only be used to offset capital gains in the
    case of corporations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The IRS has ruled that a partner who acquires interests in a
    partnership in separate transactions must combine those
    interests and maintain a single adjusted tax basis for all those
    interests. Upon a sale or other disposition of less than all of
    those interests, a portion of that tax basis must be allocated
    to the interests sold using an &#147;equitable
    apportionment&#148; method, which generally means that the tax
    basis allocated to the interest sold equals an amount that bears
    the same relation to the partner&#146;s tax basis in his entire
    interest in the partnership as the value of the interest sold
    bears to the value of the partner&#146;s entire interest in the
    partnership. Treasury Regulations under Section&#160;1223 of the
    Internal Revenue Code allow a selling unitholder who can
    identify units transferred with an ascertainable holding period
    to elect to use the actual holding period of the units
    transferred. Thus, according to the ruling, a unitholder will be
    unable to select high or low basis units to sell as would be the
    case with corporate stock, but, according to the regulations,
    may designate specific units sold for purposes of determining
    the holding period of units transferred. A unitholder electing
    to use the actual holding period of units transferred must
    consistently use that identification method for all subsequent
    sales or exchanges of units. A unitholder considering the
    purchase of additional units or a sale of units purchased in
</DIV>

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    <BR>
    71
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    separate transactions is urged to consult his tax advisor as to
    the possible consequences of this ruling and application of the
    regulations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Specific provisions of the Internal Revenue Code affect the
    taxation of some financial products and securities, including
    partnership interests, by treating a taxpayer as having sold an
    &#147;appreciated&#148; partnership interest, one in which gain
    would be recognized if it were sold, assigned or terminated at
    its fair market value, if the taxpayer or related persons
    enter(s) into:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a short sale;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an offsetting notional principal contract;&#160;or
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a futures or forward contract with respect to the partnership
    interest or substantially identical property.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Moreover, if a taxpayer has previously entered into a short
    sale, an offsetting notional principal contract or a futures or
    forward contract with respect to the partnership interest, the
    taxpayer will be treated as having sold that position if the
    taxpayer or a related person then acquires the partnership
    interest or substantially identical property. The Secretary of
    the Treasury is also authorized to issue regulations that treat
    a taxpayer that enters into transactions or positions that have
    substantially the same effect as the preceding transactions as
    having constructively sold the financial position.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Allocations Between Transferors and
    Transferees.</I>&#160;&#160;In general, our taxable income and
    losses will be determined annually, will be prorated on a
    monthly basis and will be subsequently apportioned among the
    unitholders in proportion to the number of units owned by each
    of them as of the opening of the applicable exchange on the
    first business day of the month, which we refer to in this
    prospectus as the &#147;Allocation Date.&#148; However, gain or
    loss realized on a sale or other disposition of our assets other
    than in the ordinary course of business will be allocated among
    the unitholders on the Allocation Date in the month in which
    that gain or loss is recognized. As a result, a unitholder
    transferring units may be allocated income, gain, loss and
    deduction realized after the date of transfer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The use of this method may not be permitted under existing
    Treasury Regulations. Accordingly, Vinson&#160;&#038; Elkins
    L.L.P. is unable to opine on the validity of this method of
    allocating income and deductions between transferor and
    transferee unitholders. If this method is not allowed under the
    Treasury Regulations, or only applies to transfers of less than
    all of the unitholder&#146;s interest, our taxable income or
    losses might be reallocated among the unitholders. We are
    authorized to revise our method of allocation between transferor
    and transferee unitholders, as well as unitholders whose
    interests vary during a taxable year, to conform to a method
    permitted under future Treasury Regulations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A unitholder who owns units at any time during a quarter and who
    disposes of them prior to the record date set for a cash
    distribution for that quarter will be allocated items of our
    income, gain, loss and deductions attributable to that quarter
    but will not be entitled to receive that cash distribution.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Notification Requirements.</I>&#160;&#160;A unitholder who
    sells any of his units is generally required to notify us in
    writing of that sale within 30&#160;days after the sale (or, if
    earlier, January 15 of the year following the sale). A purchaser
    of units who purchases units from another unitholder generally
    is also required to notify us in writing of that purchase within
    30&#160;days after the purchase. We are required to notify the
    IRS of that transaction and to furnish specified information to
    the transferor and transferee. Failure to notify us of a
    purchase may, in some cases, lead to the imposition of
    penalties. However, these reporting requirements do not apply to
    a sale by an individual who is a citizen of the United States
    and who effects the sale or exchange through a broker, who will
    satisfy such requirements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Constructive Termination.</I>&#160;&#160;We will be
    considered to have terminated our partnership for federal income
    tax purposes if there is a sale or exchange of 50% or more of
    the total interests in our capital and profits within a
    twelve-month period. Likewise, ETP will be considered to have
    terminated its partnership for federal income tax purposes if
    there is a sale or exchange of 50% or more of the total
    interests in ETP&#146;s capital and profits within a
    twelve-month period. A termination would, among other things,
    result in the closing of our and/or ETP&#146;s taxable years, as
    the case may be, for all unitholders, which would result in us
    and ETP both filing two tax returns (and unitholders receiving
    two
    <FONT style="white-space: nowrap">Schedule&#160;K-1&#146;s)</FONT>
    for one fiscal year, and could result in a deferral of certain
    deductions allowable in computing our taxable income for the
    year in which the termination occurs. Thus, if this occurs you
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    72
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    may be allocated an increased amount of taxable income for the
    year in which we or ETP is considered to be terminated as a
    percentage of the cash distributed to you with respect to that
    period. Although the amount of increase cannot be estimated
    because it depends upon numerous factors including the timing of
    the termination, the amount could be material. Moreover, in the
    case of a unitholder reporting on a taxable year other than a
    fiscal year ending December&#160;31, the closing of our taxable
    year may result in more than twelve months of our taxable income
    or loss being includable in his taxable income for the year of
    termination.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our termination, or the termination of ETP, currently would not
    affect our classification, or the classification of ETP, as a
    partnership for federal income tax purposes, but instead, we or
    ETP would be treated as a new partnership for tax purposes. If
    treated as a new partnership, we must make new tax elections and
    could be subject to penalties if we are unable to determine that
    a termination occurred.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Uniformity
    of Units</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because we cannot match transferors and transferees of units, we
    must maintain uniformity of the economic and tax characteristics
    of the units to a purchaser of these units. In the absence of
    uniformity, we may be unable to completely comply with a number
    of federal income tax requirements, both statutory and
    regulatory. A lack of uniformity can result from a literal
    application of Treasury
    <FONT style="white-space: nowrap">Regulation&#160;Section&#160;1.167(c)-1(a)(6)</FONT>
    and Treasury
    <FONT style="white-space: nowrap">Regulation&#160;Section&#160;1.197-2(g)(3).</FONT>
    Any non-uniformity could have a negative impact on the value of
    the units. Please read &#147;&#151; Tax Consequences of Unit
    Ownership&#160;&#151; Section&#160;754 Election.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to depreciate the portion of a Section&#160;743(b)
    adjustment attributable to unrealized appreciation in the value
    of Contributed Property, to the extent of any unamortized
    Book-Tax Disparity, using a rate of depreciation or amortization
    derived from the depreciation or amortization method and useful
    life applied to the common basis of that property, or treat that
    portion as nonamortizable, to the extent attributable to
    property the unamortized Book-Tax Disparity of which is not
    amortizable, consistent with the regulations under
    Section&#160;743 of the Internal Revenue Code, even though that
    position may be inconsistent with Treasury Regulation
    <FONT style="white-space: nowrap">Section&#160;1.167(c)-1(a)(6),</FONT>
    which is not expected to directly apply to a material portion of
    our assets, and Treasury Regulation
    <FONT style="white-space: nowrap">Section&#160;1.197-2(g)(3).</FONT>
    Please read &#147;&#151;&#160;Tax Consequences of Unit
    Ownership&#160;&#151; Section&#160;754 Election.&#148; To the
    extent that the Section&#160;743(b) adjustment is attributable
    to appreciation in value in excess of the unamortized Book-Tax
    Disparity, we will apply the rules described in the Treasury
    Regulations and legislative history. If we determine that this
    position cannot reasonably be taken, we may adopt a depreciation
    and amortization position under which all purchasers acquiring
    units in the same month would receive depreciation and
    amortization deductions, whether attributable to a common basis
    or Section&#160;743(b) adjustment, based upon the same
    applicable rate as if they had purchased a direct interest in
    our property. If this position is adopted, it may result in
    lower annual depreciation and amortization deductions than would
    otherwise be allowable to some unitholders and risk the loss of
    depreciation and amortization deductions not taken in the year
    that these deductions are otherwise allowable. This position
    will not be adopted if we determine that the loss of
    depreciation and amortization deductions will have a material
    adverse effect on the unitholders. If we choose not to utilize
    this aggregate method, we may use any other reasonable
    depreciation and amortization method to preserve the uniformity
    of the intrinsic tax characteristics of any units that would not
    have a material adverse effect on the unitholders. The IRS may
    challenge any method of depreciating the Section&#160;743(b)
    adjustment described in this paragraph. If this challenge were
    sustained, the uniformity of units might be affected, and the
    gain from the sale of units might be increased without the
    benefit of additional deductions. Please read
    &#147;&#151;&#160;Disposition of Units&#160;&#151; Recognition
    of Gain or Loss.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax-Exempt
    Organizations and Other Investors</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Ownership of units by employee benefit plans, other tax-exempt
    organizations, non-resident aliens, foreign corporations and
    other foreign persons raises issues unique to those investors
    and, as described below, may have substantially adverse tax
    consequences to them.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Employee benefit plans and most other organizations exempt from
    federal income tax, including individual retirement accounts and
    other retirement plans, are subject to federal income tax on
    unrelated business taxable income. Virtually all of our income
    allocated to a unitholder that is a tax-exempt organization will
    be unrelated business taxable income and will be taxable to them.
</DIV>

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    <BR>
    73
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Non-resident aliens and foreign corporations, trusts or estates
    that own units will be considered to be engaged in business in
    the United States because of the ownership of units. As a
    consequence, they will be required to file federal tax returns
    to report their share of our income, gain, loss or deduction and
    pay federal income tax at regular rates on their share of our
    net income or gain. Moreover, under rules applicable to publicly
    traded partnerships, we will withhold at the highest applicable
    effective tax rate from cash distributions made quarterly to
    foreign unitholders. Each foreign unitholder must obtain a
    taxpayer identification number from the IRS and submit that
    number to our transfer agent on a
    <FONT style="white-space: nowrap">Form&#160;W-8BEN</FONT>
    or applicable substitute form in order to obtain credit for
    these withholding taxes. A change in applicable law may require
    us to change these procedures.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, because a foreign corporation that owns units will
    be treated as engaged in a United States trade or business, that
    corporation may be subject to the United States branch profits
    tax at a rate of 30%, in addition to regular federal income tax,
    on its share of our income and gain, as adjusted for changes in
    the foreign corporation&#146;s &#147;U.S.&#160;net equity,&#148;
    which are effectively connected with the conduct of a United
    States trade or business. That tax may be reduced or eliminated
    by an income tax treaty between the United States and the
    country in which the foreign corporate unitholder is a
    &#147;qualified resident.&#148; In addition, this type of
    unitholder is subject to special information reporting
    requirements under Section&#160;6038C of the Internal Revenue
    Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under a ruling of the IRS, a foreign unitholder who sells or
    otherwise disposes of a unit will be subject to federal income
    tax on gain realized on the sale or disposition of that unit to
    the extent that this gain is effectively connected with a United
    States trade or business of the foreign unitholder. Because a
    foreign unitholder is considered to be engaged in business in
    the United States by virtue of the ownership of units, under
    this ruling a foreign unitholder who sells or otherwise disposes
    of a unit generally will be subject to federal income tax on
    gain realized on the sale or disposition of units. Apart from
    the ruling, a foreign unitholder will not be taxed or subject to
    withholding upon the sale or disposition of a unit if he has
    owned less than 5% in value of the units during the five-year
    period ending on the date of the disposition and if the units
    are regularly traded on an established securities market at the
    time of the sale or disposition.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Administrative
    Matters</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Information Returns and Audit Procedures.</I>&#160;&#160;We
    intend to furnish to each unitholder, within 90&#160;days after
    the close of each calendar year, specific tax information,
    including a
    <FONT style="white-space: nowrap">Schedule&#160;K-1,</FONT>
    which describes his share of our income, gain, loss and
    deduction for our preceding taxable year. In preparing this
    information, which will not be reviewed by counsel, we will take
    various accounting and reporting positions, some of which have
    been mentioned earlier, to determine his share of income, gain,
    loss and deduction. We cannot assure you that those positions
    will yield a result that conforms to the requirements of the
    Internal Revenue Code, Treasury Regulations or administrative
    interpretations of the IRS. Neither we nor Vinson&#160;&#038;
    Elkins L.L.P. can assure prospective unitholders that the IRS
    will not successfully contend in court that those positions are
    impermissible. Any challenge by the IRS could negatively affect
    the value of the units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The IRS may audit our federal income tax information returns.
    Adjustments resulting from an IRS audit may require each
    unitholder to adjust a prior year&#146;s tax liability, and
    possibly may result in an audit of his return. Any audit of a
    unitholder&#146;s return could result in adjustments not related
    to our returns as well as those related to our returns.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Partnerships generally are treated as separate entities for
    purposes of federal tax audits, judicial review of
    administrative adjustments by the IRS and tax settlement
    proceedings. The tax treatment of partnership items of income,
    gain, loss and deduction are determined in a partnership
    proceeding rather than in separate proceedings with the
    partners. The Internal Revenue Code requires that one partner be
    designated as the &#147;Tax Matters Partner&#148; for these
    purposes. The partnership agreement names the general partner as
    our Tax Matters Partner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Tax Matters Partner will make some elections on our behalf
    and on behalf of unitholders. In addition, the Tax Matters
    Partner can extend the statute of limitations for assessment of
    tax deficiencies against unitholders for items in our returns.
    The Tax Matters Partner may bind a unitholder with less than a
    1% profits
</DIV>

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    <BR>
    74
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    interest in us to a settlement with the IRS unless that
    unitholder elects, by filing a statement with the IRS, not to
    give that authority to the Tax Matters Partner. The Tax Matters
    Partner may seek judicial review, by which all the unitholders
    are bound, of a final partnership administrative adjustment and,
    if the Tax Matters Partner fails to seek judicial review,
    judicial review may be sought by any unitholder having at least
    a 1% interest in profits or by any group of unitholders having
    in the aggregate at least a 5% interest in profits. However,
    only one action for judicial review will go forward, and each
    unitholder with an interest in the outcome may participate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A unitholder must file a statement with the IRS identifying the
    treatment of any item on his federal income tax return that is
    not consistent with the treatment of the item on our return.
    Intentional or negligent disregard of this consistency
    requirement may subject a unitholder to substantial penalties.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Nominee Reporting.</I>&#160;&#160;Persons who hold an
    interest in us as a nominee for another person are required to
    furnish to us:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the name, address and taxpayer identification number of the
    beneficial owner and the nominee;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    whether the beneficial owner is:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;a person that is not a United States person;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;a foreign government, an international organization or
    any wholly owned agency or instrumentality of either of the
    foregoing;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;a tax-exempt entity;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount and description of units held, acquired or
    transferred for the beneficial owner;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    specific information including the dates of acquisitions and
    transfers, means of acquisitions and transfers, and acquisition
    cost for purchases, as well as the amount of net proceeds from
    sales.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Brokers and financial institutions are required to furnish
    additional information, including whether they are United States
    persons and specific information on units they acquire, hold or
    transfer for their own account. A penalty of $50 per failure, up
    to a maximum of $100,000 per calendar year, is imposed by the
    Internal Revenue Code for failure to report that information to
    us. The nominee is required to supply the beneficial owner of
    the units with the information furnished to us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Accuracy-Related Penalties.</I>&#160;&#160;An additional tax
    equal to 20% of the amount of any portion of an underpayment of
    tax that is attributable to one or more specified causes,
    including negligence or disregard of rules or regulations,
    substantial understatements of income tax and substantial
    valuation misstatements, is imposed by the Internal Revenue
    Code. No penalty will be imposed, however, for any portion of an
    underpayment if it is shown that there was a reasonable cause
    for that portion and that the taxpayer acted in good faith
    regarding that portion.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For individuals, a substantial understatement of income tax in
    any taxable year exists if the amount of the understatement
    exceeds the greater of 10% of the tax required to be shown on
    the return for the taxable year or $5,000. The amount of any
    understatement subject to penalty generally is reduced if any
    portion is attributable to a position adopted on the return:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;for which there is, or was, &#147;substantial
    authority&#148;;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;as to which there is a reasonable basis and the
    pertinent facts of that position are disclosed on the return.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If any item of income, gain, loss or deduction included in the
    distributive shares of unitholders for a given year might result
    in that kind of an &#147;understatement&#148; of income for
    which no &#147;substantial authority&#148; exists, we will
    disclose the pertinent facts on our return. In addition, we will
    make a reasonable effort to furnish sufficient information for
    unitholders to make adequate disclosure on their returns and to
    take other actions as may be appropriate to permit unitholders
    to avoid liability for penalties. More stringent rules apply to
    &#147;tax shelters,&#148; which we do not believe includes us.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    75
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A substantial valuation misstatement exists if the value of any
    property, or the adjusted basis of any property, claimed on a
    tax return is 150% or more of the amount determined to be the
    correct amount of the valuation or adjusted basis. No penalty is
    imposed unless the portion of the underpayment attributable to a
    substantial valuation misstatement exceeds $5,000 ($10,000 for
    most corporations). If the valuation claimed on a return is 200%
    or more than the correct valuation, the penalty imposed
    increases to 40%.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Reportable Transactions.</I>&#160;&#160;If we were to engage
    in a &#147;reportable transaction,&#148; we (and possibly you
    and others) would be required to make a detailed disclosure of
    the transaction to the IRS. A transaction may be a reportable
    transaction based upon any of several factors, including the
    fact that it is a type of tax avoidance transaction publicly
    identified by the IRS as a &#147;listed transaction&#148; or
    that it produces certain kinds of losses for partnerships,
    individuals, S&#160;corporations, and trusts in excess of
    $2&#160;million in any single year, or $4&#160;million in any
    combination of tax years. Our participation in a reportable
    transaction could increase the likelihood that our federal
    income tax information return (and possibly your tax return)
    would be audited by the IRS. Please read &#147;&#151;
    Information Returns and Audit Procedures.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Moreover, if we were to participate in a reportable transaction
    with a significant purpose to avoid or evade tax, or in any
    listed transaction, you may be subject to the following
    provisions of the American Jobs Creation Act of 2004:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    accuracy-related penalties with a broader scope, significantly
    narrower exceptions, and potentially greater amounts than
    described above at &#147;&#151; Accuracy-Related Penalties,&#148;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    for those persons otherwise entitled to deduct interest on
    federal tax deficiencies, nondeductibility of interest on any
    resulting tax liability&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    in the case of a listed transaction, an extended statute of
    limitations.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We do not expect to engage in any &#147;reportable
    transactions.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">State,
    Local, Foreign and Other Tax Considerations</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to federal income taxes, you likely will be subject
    to other taxes, such as state, local and foreign income taxes,
    unincorporated business taxes, and estate, inheritance or
    intangible taxes that may be imposed by the various
    jurisdictions in which we or ETP do business or own property or
    in which you are a resident. Although an analysis of those
    various taxes is not presented here, each prospective unitholder
    should consider their potential impact on his investment in us.
    We or ETP may also own property or do business in other
    jurisdictions in the future. Although you may not be required to
    file a return and pay taxes in some jurisdictions because your
    income from that jurisdiction falls below the filing and payment
    requirement, you will be required to file income tax returns and
    to pay income taxes in many other jurisdictions in which we may
    do business or own property and may be subject to penalties for
    failure to comply with those requirements. In some
    jurisdictions, tax losses may not produce a tax benefit in the
    year incurred and may not be available to offset income in
    subsequent taxable years. Some jurisdictions may require us, or
    we may elect, to withhold a percentage of income from amounts to
    be distributed to a unitholder who is not a resident of the
    jurisdiction. Withholding, the amount of which may be greater or
    less than a particular unitholder&#146;s income tax liability to
    the jurisdiction, generally does not relieve a nonresident
    unitholder from the obligation to file an income tax return.
    Amounts withheld will be treated as if distributed to
    unitholders for purposes of determining the amounts distributed
    by us. Please read &#147;&#151; Tax Consequences of Unit
    Ownership&#160;&#151; Entity-Level&#160;Collections.&#148; Based
    on current law and our estimate of our future operations, the
    general partner anticipates that any amounts required to be
    withheld will not be material.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is the responsibility of each unitholder to investigate the
    legal and tax consequences, under the laws of pertinent
    jurisdictions, of his investment in us. Accordingly, each
    prospective unitholder is urged to consult, and depend upon, his
    tax counsel or other advisor with regard to those matters.
    Further, it is the responsibility of each unitholder to file all
    state, local and foreign, as well as United States federal tax
    returns that may be required of him. Vinson&#160;&#038; Elkins
    L.L.P. has not rendered an opinion on the state, local or
    foreign tax consequences of an investment in us.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    76
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "PLAN OF DISTRIBUTION" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='113'></A><B><FONT style="font-family: 'Times New Roman', Times">PLAN
    OF DISTRIBUTION</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under this prospectus, we intend to offer our securities to the
    public:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    through one or more broker-dealers;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    through underwriters;&#160;or
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    directly to investors.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will fix a price or prices of our securities at:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    market prices prevailing at the time of any sale under this
    registration statement;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    prices related to market prices;&#160;or
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    negotiated prices.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may change the price of the securities offered from time to
    time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will pay or allow distributors&#146; or sellers&#146;
    commissions that will not exceed those customary in the types of
    transactions involved. Broker-dealers may act as agent or may
    purchase securities as principal and thereafter resell the
    securities from time to time:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    in or through one or more transactions (which may involve
    crosses and block transactions) or distributions;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    on the New York Stock Exchange;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    in the over-the-counter market;&#160;or
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    in private transactions.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Broker-dealers or underwriters may receive compensation in the
    form of underwriting discounts or commissions and may receive
    commissions from purchasers of the securities for whom they may
    act as agents. If any broker-dealer purchases the securities as
    principal, it may effect resales of the securities from time to
    time to or through other broker-dealers, and other
    broker-dealers may receive compensation in the form of
    concessions or commissions from the purchasers of securities for
    whom they may act as agents.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent required, the names of the specific managing
    underwriter or underwriters, if any, as well as other important
    information, will be set forth in prospectus supplements. In
    that event, the discounts and commissions we will allow or pay
    to the underwriters, if any, and the discounts and commissions
    the underwriters may allow or pay to dealers or agents, if any,
    will be set forth in, or may be calculated from, the prospectus
    supplements. Any underwriters, brokers, dealers and agents who
    participate in any sale of the securities may also engage in
    transactions with, or perform services for, us or our affiliates
    in the ordinary course of their businesses. We may indemnify
    underwriters, brokers, dealers and agents against specific
    liabilities, including liabilities under the Securities Act.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent required, this prospectus may be amended or
    supplemented from time to time to describe a specific plan of
    distribution.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with offerings under this shelf registration and
    in compliance with applicable law, underwriters, brokers or
    dealers may engage in transactions which stabilize or maintain
    the market price of the securities at levels above those which
    might otherwise prevail in the open market. Specifically,
    underwriters, brokers or dealers may over-allot in connection
    with offerings, creating a short position in the securities for
    their own accounts. For the purpose of covering a syndicate
    short position or stabilizing the price of the securities, the
    underwriters, brokers or dealers may place bids for the
    securities or effect purchases of the securities in the open
    market. Finally, the underwriters may impose a penalty whereby
    selling concessions allowed to syndicate members or other
    brokers or dealers for distribution the securities in offerings
    may be reclaimed by the syndicate if the syndicate repurchases
    previously distributed securities in transactions to cover short
    positions, in stabilization transactions or otherwise. These
    activities may stabilize, maintain or otherwise affect the
    market price of the securities, which may be higher than the
    price that might otherwise prevail in the open market, and, if
    commenced, may be discontinued at any time.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    77
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "LEGAL MATTERS" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='114'></A><B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Vinson&#160;&#038; Elkins L.L.P., Houston, Texas, will pass upon
    the validity of the securities offered in this registration
    statement.
</DIV>


<!-- link1 "EXPERTS" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='115'></A><B><FONT style="font-family: 'Times New Roman', Times">EXPERTS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The consolidated financial statements of Energy Transfer Equity,
    L.P. and LE GP, L.L.C., all incorporated in this prospectus by
    reference from our Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended August&#160;31, 2006 have been audited by
    Grant Thornton LLP, independent registered public accountants,
    as indicated in their reports with respect thereto, and are
    included herein in reliance upon the authority of said firm as
    experts in giving said reports.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The audited historical financial statements of Transwestern
    Pipeline Company, LLC as of December&#160;31, 2005 and for the
    year then ended, included in Exhibit&#160;99.2 of our Current
    Report on
    <FONT style="white-space: nowrap">Form&#160;8-K/A</FONT>
    dated December&#160;1, 2006 have been so incorporated in
    reliance on the report of PricewaterhouseCoopers LLP,
    independent accountants, given on the authority of said firm as
    experts in auditing and accounting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The audited historical financial statements of Titan Energy
    Partners LP and subsidiary (the &#147;Partnership&#148;) as of
    June&#160;30, 2005 and for the periods from December&#160;30,
    2004 to June&#160;30, 2005 and from July&#160;1, 2004 to
    December&#160;19, 2004 included in this Exhibit&#160;99.1 of our
    Current Report on
    <FONT style="white-space: nowrap">Form&#160;8-K</FONT>
    dated June&#160;6, 2007 have been so incorporated in reliance on
    the reports (which contain an explanatory paragraph relating to
    the Partnership&#146;s emergence from bankruptcy as described in
    Note&#160;1 to the financial statements) of
    PricewaterhouseCoopers LLP, independent accountants, given on
    the authority of said firm as experts in auditing and accounting.
</DIV>


<!-- link1 "WHERE YOU CAN FIND MORE INFORMATION" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='116'></A><B><FONT style="font-family: 'Times New Roman', Times">WHERE
    YOU CAN FIND MORE INFORMATION</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus, including any documents incorporated herein by
    reference, constitutes a part of a registration statement on
    <FONT style="white-space: nowrap">Form&#160;S-3</FONT>
    that we filed with the SEC under the Securities Act. This
    prospectus does not contain all the information set forth in the
    registration statement. You should refer to the registration
    statement and its related exhibits and schedules, and the
    documents incorporated herein by reference, for further
    information about our company and the securities offered in this
    prospectus. Statements contained in this prospectus concerning
    the provisions of any document are not necessarily complete and,
    in each instance, reference is made to the copy of that document
    filed as an exhibit to the registration statement or otherwise
    filed with the SEC, and each such statement is qualified by this
    reference. The registration statement and its exhibits and
    schedules, and the documents incorporated herein by reference,
    are on file at the offices of the SEC and may be inspected
    without charge.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We file annual, quarterly, and current reports, proxy statements
    and other information with the SEC. You can read and copy any
    materials we file with the SEC at the SEC&#146;s Public
    Reference Room at 100&#160;F&#160;Street, N.E.,
    Washington,&#160;D.C. 20549. You can obtain information about
    the operation of the Public Reference Room by calling the SEC at
    <FONT style="white-space: nowrap">1-800-SEC-0330.</FONT>
    The SEC also maintains a website that contains information we
    file electronically with the SEC, which you can access over the
    Internet at
    <FONT style="white-space: nowrap">http://www.sec.gov.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our home page is located at
    <FONT style="white-space: nowrap">http://www.energytransfer.com.</FONT>
    Our annual reports on
    <FONT style="white-space: nowrap">Form&#160;10-K,</FONT>
    our quarterly reports on
    <FONT style="white-space: nowrap">Form&#160;10-Q,</FONT>
    current reports on
    <FONT style="white-space: nowrap">Form&#160;8-K</FONT>
    and other filings with the SEC are available free of charge
    through our web site as soon as reasonably practicable after
    those reports or filings are electronically filed or furnished
    to the SEC. Information on our web site or any other web site is
    not incorporated by reference in this prospectus and does not
    constitute a part of this prospectus.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    78
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='117'></A><B><FONT style="font-family: 'Times New Roman', Times">INCORPORATION
    OF CERTAIN DOCUMENTS BY REFERENCE</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are incorporating by reference in this prospectus information
    we file with the SEC, which means that we are disclosing
    important information to you by referring you to those
    documents. The information we incorporate by reference is an
    important part of this prospectus, and later information that we
    file with the SEC automatically will update and supersede this
    information. We incorporate by reference the documents listed
    below and any future filings we make with the SEC, including all
    such documents we may file after the date of the initial
    registration statement and prior to the effectiveness of the
    registration statement, under Sections&#160;13(a), 13(c), 14 or
    15(d) of the Exchange Act, excluding any information in those
    documents that is deemed by the rules of the SEC to be furnished
    not filed, until we close this offering:
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our annual report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended August&#160;31, 2006;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our quarterly reports on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    for the periods ended November&#160;30, 2006, February&#160;28,
    2007 and May&#160;31, 2007;&#160;and
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our current reports on
    <FONT style="white-space: nowrap">Form&#160;8-K</FONT>
    filed September&#160;19, 2006, September&#160;25, 2006,
    October&#160;2, 2006, November&#160;2, 2006, November&#160;30,
    2006, as amended, December&#160;5, 2006, December&#160;21, 2006,
    December&#160;26, 2006, January&#160;8, 2007, January&#160;17,
    2007, February&#160;23, 2007, March&#160;5, 2007, March&#160;29,
    2007, May&#160;8, 2007, June&#160;6, 2007, June&#160;11, 2007,
    June&#160;21, 2007, July&#160;26, 2007, August&#160;17, 2007,
    both on September&#160;26, 2007, both on October&#160;9, 2007
    and October&#160;15, 2007.
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You may request a copy of these filings, which we will provide
    to you at no cost, by writing or telephoning us at the following
    address and telephone number:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Energy Transfer Equity, L.P.
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3738 Oak Lawn Avenue
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dallas, Texas 75219
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Attention: Sonia Aube
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Telephone:
    <FONT style="white-space: nowrap">(214)&#160;981-0700</FONT>
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    79
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE style="color: #FF0000" width="100%" border="1" cellpadding="5"><TR><TD style=text-align:justify>
<FONT style="font-size: 8pt; font-family: Arial, Helvetica; color: #E8112D">The
information in this prospectus is not complete and may be
changed. This prospectus is not an offer to sell nor does it
seek an offer to buy these securities in any jurisdiction where
the offer or sale is not permitted. We may not sell these
securities until the registration statement filed with the
Securities and Exchange Commission is effective.<BR>
</FONT>
</TD></TR></TABLE>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times; color: #E8112D">SUBJECT
    TO COMPLETION, DATED OCTOBER&#160;19, 2007</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Preliminary Prospectus</B>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <IMG src="h48218a1h4821803.gif" alt="" ><B><FONT style="font-family: 'Times New Roman', Times">
    </FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 14pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">66,625,100</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 24pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Energy
    Transfer Equity, L.P.</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 18%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 14pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Common
    Units</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 18%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The securities to be offered and sold using this prospectus are
    currently issued and outstanding common units representing
    limited partner interests in us. These common units may be
    offered and sold by the selling unitholders named in this
    prospectus or in any supplement to this prospectus from time to
    time in accordance with the provisions set forth under
    &#147;Plan of Distribution.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The selling unitholders may sell the common units offered by
    this prospectus from time to time on any exchange on which the
    common units are listed on terms to be negotiated with buyers.
    It may also sell the common units in private sales or through
    dealers or agents. The selling unitholders may sell the common
    units at prevailing market prices or at prices negotiated with
    buyers. The selling unitholders will be responsible for any
    commissions due to brokers, dealers or agents. We will be
    responsible for all other offering expenses. We will not receive
    any of the proceeds from the sale by the selling unitholders of
    the common units offered by this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should carefully read this prospectus and any supplement
    before you invest. You also should read the documents we have
    referred you to in the &#147;Where You Can Find More
    Information&#148; section of this prospectus for information on
    us and our financial statements. This prospectus may not be used
    to consummate sales of securities unless accompanied by a
    prospectus supplement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common units are listed on the New York Stock Exchange under
    the symbol &#147;ETE.&#148;
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 18%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each time we sell securities we will provide a prospectus
    supplement that will contain specific information about the
    terms of that offering. The prospectus supplement may also add,
    update or change information contained in this prospectus. You
    should read this prospectus and any prospectus supplement
    carefully before you invest. You should also read the documents
    we have referred you to in the &#147;Where You Can Find More
    Information&#148; section of this prospectus for information on
    us and for our financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 12pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Investing in our securities involves risks. Limited
    partnerships are inherently different from corporations. You
    should carefully consider the risk factors beginning on page 4
    of this prospectus and in the applicable prospectus supplement
    before you make an investment in our securities</B>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or passed upon the adequacy or accuracy of this
    prospectus. Any representation to the contrary is a criminal
    offense.</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 18%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The date of this prospectus
    is&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2007.
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Table of
    Contents</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="97%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#118'>About This Prospectus</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#119'>Energy Transfer Equity, L.P.</A>&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#120'>Energy Transfer Partners, L.P.</A>&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#121'>Cautionary Statement Concerning Forward-Looking
    Statements</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#122'>Risk Factors</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    4
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#123'>Use of Proceeds</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    34
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#124'>Description of Our Common Units</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    35
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#125'>Our Cash Distribution Policy</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    39
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#126'>ETP&#146;S Cash Distribution Policy</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    42
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#127'>Material Provisions of Our Partnership
    Agreement</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    46
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#128'>Material Provisions of ETP&#146;s Partnership
    Agreement</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    57
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#129'>Material Tax Consequences</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    63
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#130'>Selling Unitholders</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    77
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#131'>Plan of Distribution</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    82
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#132'>Legal Matters</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    83
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#133'>Experts</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    83
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#134'>Where You Can Find More Information</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    83
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#135'>Incorporation of Certain Documents by
    Reference</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    84
</TD>
<TD>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>In making your investment decision, you should rely only on
    the information contained or incorporated by reference in this
    prospectus. We have not authorized anyone to provide you with
    any other information. If anyone provides you with different or
    inconsistent information, you should not rely on it</B>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>You should not assume that the information contained in this
    prospectus is accurate as of any date other than the date on the
    front cover of this prospectus. You should not assume that the
    information contained in the documents incorporated by reference
    in this prospectus is accurate as of any date other than the
    respective dates of those documents. Our business, financial
    condition, results of operations and prospects may have changed
    since those dates.</B>
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "ABOUT THIS PROSPECTUS" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='118'></A><B><FONT style="font-family: 'Times New Roman', Times">ABOUT
    THIS PROSPECTUS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus is part of a registration statement that we
    filed with the Securities and Exchange Commission, or SEC, using
    a &#147;shelf&#148; registration process. Under this shelf
    process the selling unitholders named in this prospectus or in
    any supplement to this prospectus may sell the common units
    described in this prospectus in one or more offerings. This
    prospectus provides you with a general description of the common
    units the selling unitholders may offer. Each time it sells
    common units, the selling unitholders will provide a prospectus
    supplement that will contain specific information about the
    terms of that offering. The prospectus supplement may also add,
    update or change information contained in this prospectus. You
    should read both the prospectus and the prospectus supplement
    relating to the common units offered to you together with the
    additional information described under the heading &#147;Where
    You Can Find More Information.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All references in this prospectus to &#147;we,&#148;
    &#147;us,&#148; &#147;Energy Transfer Equity&#148; and
    &#147;our&#148; refer to Energy Transfer Equity, L.P. and its
    subsidiaries, Energy Transfer Partners, L.L.C. and Energy
    Transfer Partners GP, L.P. All references in this prospectus to
    &#147;our general partner&#148; refer to LE GP, LLC. All
    references in this prospectus to &#147;Energy Transfer Partners
    GP&#148; or &#147;ETP GP&#148; refer to Energy Transfer Partners
    GP, L.P. All references in this prospectus to &#147;Energy
    Transfer Partners&#148; or &#147;ETP&#148; refer to Energy
    Transfer Partners, L.P. and its wholly owned subsidiaries and
    predecessors.
</DIV>


<!-- link1 "ENERGY TRANSFER EQUITY, L.P." -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='119'></A><B><FONT style="font-family: 'Times New Roman', Times">ENERGY
    TRANSFER EQUITY, L.P.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are a publicly traded limited partnership. Our common units
    are publicly traded on the New York Stock Exchange
    (&#147;NYSE&#148;) under the ticker symbol &#147;ETE.&#148; We
    were formed in September 2002 and completed our initial public
    offering of 24,150,000 common units in February 2006. Our only
    cash generating assets are our direct and indirect investments
    in limited partner and general partner interests in our
    subsidiary, Energy Transfer Partners, L.P. Our direct and
    indirect ownership of ETP consists of approximately
    62.5&#160;million common units, the 2% general partner interests
    (through Energy Transfer Partners GP, L.P., ETP&#146;s general
    partner and one of our subsidiaries) and 100% of the incentive
    distribution rights.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our principal executive offices are located at 3738 Oak Lawn
    Avenue, Dallas, Texas 75219, and our telephone number at that
    location is
    <FONT style="white-space: nowrap">(214)&#160;981-0700.</FONT>
</DIV>


<!-- link1 "ENERGY TRANSFER PARTNERS, L.P." -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='120'></A><B><FONT style="font-family: 'Times New Roman', Times">ENERGY
    TRANSFER PARTNERS, L.P.</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP is a publicly traded partnership owning and operating a
    diversified portfolio of energy assets. ETP&#146;s natural gas
    operations include intrastate natural gas gathering and
    transportation pipelines, interstate transportation pipelines,
    natural gas treating and processing assets located in Texas, New
    Mexico, Arizona, Oklahoma, Louisiana, Utah and Colorado and
    three natural gas storage facilities located in Texas. These
    assets include approximately 14,000&#160;miles of intrastate
    pipeline in service, with an additional 500&#160;miles of
    intrastate pipeline under construction, and 2,400&#160;miles of
    interstate pipelines. ETP is also one of the three largest
    retail marketers of propane in the United States, serving more
    than one million customers across the country.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>


<!-- link1 "CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='121'></A><B><FONT style="font-family: 'Times New Roman', Times">CAUTIONARY
    STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus contains various forward-looking statements and
    information that are based on our beliefs and those of our
    general partner, as well as assumptions made by and information
    currently available to us. These forward-looking statements are
    identified as any statement that does not relate strictly to
    historical or current facts. When used in this prospectus, words
    such as &#147;anticipate,&#148; &#147;project,&#148;
    &#147;expect,&#148; &#147;plan,&#148; &#147;goal,&#148;
    &#147;forecast,&#148; &#147;intend,&#148; &#147;could,&#148;
    &#147;believe,&#148; &#147;may,&#148; and similar expressions
    and statements regarding our plans and objectives for future
    operations, are intended to identify forward-looking statements.
    Although we and our general partner believe that the
    expectations on which such forward-looking statements are based
    are reasonable, neither we nor our general partner can give
    assurances that such expectations will prove to be correct.
    Forward-looking statements are subject to a variety of risks,
    uncertainties and assumptions. If one or more of these risks or
    uncertainties materialize, or if underlying assumptions prove
    incorrect, our actual results
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    1
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    may vary materially from those anticipated, estimated, projected
    or expected. Among the key risk factors that may have a direct
    bearing on our results of operations and financial condition are:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount of natural gas transported on ETP&#146;s pipelines
    and gathering systems;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of throughput in ETP&#146;s natural gas processing and
    treating facilities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the fees ETP charges and the margins it realizes for its
    gathering, treating, processing, storage and transportation
    services;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the prices and market demand for, and the relationship between,
    natural gas and natural gas liquids, or NGLs;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    energy prices generally;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the prices of natural gas and propane compared to the price of
    alternative and competing fuels;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the general level of petroleum product demand and the
    availability and price of propane supplies;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of domestic oil, propane and natural gas production;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the availability of imported oil and natural gas;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability to obtain adequate supplies of propane for retail
    sale in the event of an interruption in supply or transportation
    and the availability of capacity to transport propane to market
    areas;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    actions taken by foreign oil and gas producing nations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the political and economic stability of petroleum producing
    nations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the effect of weather conditions on demand for oil, natural gas
    and propane;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    availability of local, intrastate and interstate transportation
    systems;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the continued ability to find and contract for new sources of
    natural gas supply;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    availability and marketing of competitive fuels;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the impact of energy conservation efforts;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    energy efficiencies and technological trends;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    of governmental regulation and taxation;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    changes to, and the application of, regulation of tariff rates
    and operational requirements related to our interstate and
    intrastate pipelines;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    hazards or operating risks incidental to the gathering,
    treating, processing and transporting of natural gas and NGLs or
    to the transporting, storing and distributing of propane that
    may not be fully covered by insurance;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the maturity of the propane industry and competition from other
    propane distributors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    competition from other midstream companies, interstate pipeline
    companies and propane distribution companies;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    loss of key personnel;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    loss of key natural gas producers or the providers of
    fractionation services;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reductions in the capacity or allocations of third party
    pipelines that connect with ETP&#146;s pipelines and facilities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the effectiveness of risk-management policies and procedures and
    the ability of ETP&#146;s liquids marketing counterparties to
    satisfy their financial commitments;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the nonpayment or nonperformance by ETP&#146;s customers;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    2
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    regulatory, environmental, political and legal uncertainties
    that may affect the timing and cost of our internal growth
    projects, such as our construction of additional pipeline
    systems;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    risks associated with the construction of new pipelines and
    treating and processing facilities or additions to ETP&#146;s
    existing pipelines and facilities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the availability and cost of capital and ETP&#146;s ability to
    access certain capital sources;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability to successfully identify and consummate strategic
    acquisitions at purchase prices that are accretive to ETP&#146;s
    financial results and to successfully integrate acquired
    businesses;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    changes in laws and regulations to which we are subject,
    including tax, environmental, transportation and employment
    regulations or new interpretations by regulatory agencies
    concerning such laws and regulations;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the costs and effects of legal and administrative proceedings.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should not put undue reliance on any forward-looking
    statements. When considering forward-looking statements, please
    review the risk factors described under &#147;Risk Factors&#148;
    in this prospectus.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    3
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "RISK FACTORS" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='122'></A><B><FONT style="font-family: 'Times New Roman', Times">RISK
    FACTORS</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>An investment in our securities involves a high degree of
    risk. You should carefully consider the following risk factors,
    together with all of the other information included in, or
    incorporated by reference into, this report in evaluating an
    investment in our securities. If any of these risks were to
    occur, our business, financial condition or results of
    operations could be adversely affected. In that case, the
    trading price of our common units could decline and you could
    lose all or part of your investment.</I>
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Inherent in an Investment in Us</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    only assets are our partnership interests, including the
    incentive distribution rights, in ETP and, therefore, our cash
    flow is dependent upon the ability of ETP to make distributions
    in respect of those partnership interests.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The amount of cash that ETP can distribute to its partners,
    including us, each quarter depends upon the amount of cash it
    generates from its operations, which will fluctuate from quarter
    to quarter and will depend on, among other things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount of natural gas transported in ETP&#146;s pipelines
    and gathering systems;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of throughput in its processing and treating
    operations;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the fees it charges and the margins it realizes for its
    gathering, treating, processing, storage and transportation
    services;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the price of natural gas;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the relationship between natural gas and NGL prices;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the weather in its operating areas;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the cost of the propane it buys for resale and the prices it
    receives for its propane;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of competition from other midstream companies,
    interstate pipeline companies, propane companies and other
    energy providers;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of its operating costs;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    prevailing economic conditions;&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of ETP&#146;s hedging activities.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the actual amount of cash that ETP will have
    available for distribution will also depend on other factors,
    such as:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of capital expenditures it makes;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of non-operating costs related to litigation and
    regulatory compliance matters;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the cost of acquisitions, if any;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the levels of any margin calls that result from changes in
    commodity prices;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    its debt service requirements;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fluctuations in its working capital needs;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    its ability to make working capital borrowings under its credit
    facilities to make distributions;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    its ability to access capital markets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    restrictions on distributions contained in its debt
    agreements;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount, if any, of cash reserves established by its general
    partner in its discretion for the proper conduct of ETP&#146;s
    business.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because of these factors, we cannot guarantee that ETP will have
    sufficient available cash to pay a specific level of cash
    distributions to its partners.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, you should be aware that the amount of cash that
    ETP has available for distribution depends primarily upon its
    cash flow, including cash flow from financial reserves and
    working capital borrowings, and
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    is not solely a function of profitability, which will be
    affected by non-cash items. As a result, ETP may make cash
    distributions during periods when it records net losses and may
    not make cash distributions during periods when it records net
    income. Please read &#147;&#151;&#160;Risks Related to Energy
    Transfer Partners&#146; Business&#148; for a discussion of
    further risks affecting ETP&#146;s ability to generate
    distributable cash flow.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    not have sufficient cash to pay distributions at our current
    quarterly distribution level or to increase
    distributions.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The source of our earnings and cash flow is cash distributions
    from ETP. Therefore, the amount of distributions we are
    currently able to make to our unitholders may fluctuate based on
    the level of distributions ETP makes to its partners. ETP may
    not be able to continue to make quarterly distributions at its
    current level or increase its quarterly distributions in the
    future. In addition, while we would expect to increase or
    decrease distributions to our unitholders if ETP increases or
    decreases distributions to us, the timing and amount of such
    increased or decreased distributions, if any, will not
    necessarily be comparable to the timing and amount of the
    increase or decrease in distributions made by ETP to us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our ability to distribute cash received from ETP to our
    unitholders is limited by a number of factors, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    interest expense and principal payments on our indebtedness;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    restrictions on distributions contained in any current or future
    debt agreements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our general and administrative expenses;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    expenses of our subsidiaries other than ETP, including tax
    liabilities of our corporate subsidiaries, if any;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    capital contributions to maintain our 2% general partner
    interest in ETP as required by the partnership agreement of ETP
    upon the issuance of additional partnership securities by
    ETP;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reserves our general partner believes prudent for us to maintain
    for the proper conduct of our business or to provide for future
    distributions.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We cannot guarantee that in the future we will be able to pay
    distributions or that any distributions we do make will be at or
    above our current quarterly distribution. The actual amount of
    cash that is available for distribution to our unitholders will
    depend on numerous factors, many of which are beyond our control
    or the control of our general partner.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    general partner is not elected by the unitholders and cannot be
    removed without its consent.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unlike the holders of common stock in a corporation, our
    unitholders have only limited voting rights on matters affecting
    our business and, therefore, limited ability to influence
    management&#146;s decisions regarding our business. Our
    unitholders do not have the ability to elect our general partner
    or the officers or directors of our general partner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, if our unitholders are dissatisfied with the
    performance of our general partner, they have little ability to
    remove our general partner. Our general partner may not be
    removed except upon the vote of the holders of at least
    66<FONT style="vertical-align: top; font-size: 70&#37;">2</FONT>/<FONT style="font-size: 70&#37;">3</FONT>%
    of our outstanding units. Because affiliates of our general
    partner (including Enterprise GP Holdings L.P.) own
    approximately 122.6&#160;million common units, representing
    54.8% of our outstanding common units, it will be particularly
    difficult for our general partner to be removed without the
    consent of such affiliates. As a result, the price at which our
    common units will trade may be lower because of the absence or
    reduction of a takeover premium in the trading price.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">A
    reduction in ETP&#146;s distributions will disproportionately
    affect the amount of cash distributions to which we are
    entitled.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our direct and indirect ownership of 100% of the incentive
    distribution rights in ETP (50% prior to November&#160;1, 2006),
    through our ownership of equity interests in Energy Transfer
    Partners GP, the holder of
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    5
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the incentive distribution rights, entitles us to receive our
    pro rata share of specified percentages of total cash
    distributions made by ETP as it reaches established target cash
    distribution levels. The amount of the cash distributions that
    we received from ETP during our fiscal year 2006 related to our
    ownership interest in the incentive distribution rights
    increased at a more rapid rate than the amount of the cash
    distributions related to our 2% general partner interest in ETP
    and our ETP common units. We currently receive our pro rata
    share of cash distributions from ETP based on the highest
    incremental percentage, 48%, to which Energy Transfer Partners
    GP is entitled pursuant to its incentive distribution rights in
    ETP. A decrease in the amount of distributions by ETP to less
    than $0.4125 per common unit per quarter would reduce Energy
    Transfer Partners GP&#146;s percentage of the incremental cash
    distributions above $0.3175 per common unit per quarter from 48%
    to 23%. As a result, any such reduction in quarterly cash
    distributions from ETP would have the effect of
    disproportionately reducing the amount of all distributions that
    we receive from ETP based on our ownership interest in the
    incentive distribution rights in ETP as compared to cash
    distributions we receive from ETP on our 2% general partner
    interest in ETP and our ETP common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Neither
    we nor ETP will be prohibited from competing with each
    other.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Neither our partnership agreement nor the partnership agreement
    of ETP prohibits us from owning assets or engaging in businesses
    that compete directly or indirectly with ETP or prohibit ETP
    from owning assets or engaging in businesses that compete
    directly or indirectly with us, except that ETP&#146;s
    partnership agreement prohibits us from engaging in the retail
    propane business in the United States. In addition, we may
    acquire, construct or dispose of any assets in the future
    without any obligation to offer ETP the opportunity to purchase
    or construct any of those assets, and ETP may acquire, construct
    or dispose of any assets in the future without any obligation to
    offer us the opportunity to purchase or construct any of those
    assets.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    increased consolidated debt level and our debt agreements and
    those of our subsidiaries may limit our ability to make
    distributions to unitholders and may limit the distributions we
    receive from ETP and our future financial and operating
    flexibility.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of May&#160;31, 2007, we had approximately $5.0&#160;billion
    of consolidated debt outstanding. Our level of indebtedness
    affects our operations in several ways, including, among other
    things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a significant portion of our and ETP&#146;s cash flow from
    operations will be dedicated to the payment of principal and
    interest on outstanding debt and will not be available for other
    purposes, including payment of distributions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    covenants contained in our and ETP&#146;s existing debt
    arrangements require us to meet financial tests that may
    adversely affect our flexibility in planning for and reacting to
    changes in our and ETP&#146;s business;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to obtain additional financing for working capital,
    capital expenditures, acquisitions and general partnership
    purposes may be limited;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we may be at a competitive disadvantage relative to similar
    companies that have less debt;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we may be more vulnerable to adverse economic and industry
    conditions as a result of our significant debt level;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    failure to comply with the various restrictive and affirmative
    covenants of the credit agreements could negatively impact our
    ability and the ability of our subsidiaries to incur additional
    debt and to pay distributions. We are required to measure these
    financial tests and covenants quarterly and, as of May&#160;31,
    2007, we were in compliance with all financial requirements,
    tests, limitations, and covenants related to financial ratios
    under our existing credit agreements.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Increases
    in interest rates could materially adversely affect our
    business, results of operations, cash flows and financial
    condition.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to our exposure to commodity prices, we have
    significant exposure to increases in interest rates. As of
    May&#160;31, 2007, we had approximately $5.0&#160;billion of
    consolidated debt, of which approximately
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    6
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    $4.1&#160;billion was at fixed interest rates and approximately
    $0.9&#160;billion was at variable interest rates, after giving
    effect to our existing interest swap arrangements. We may enter
    into additional interest rate swap arrangements. As a result,
    our results of operations, cash flows and financial condition
    could be materially adversely affected by significant increases
    in interest rates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An increase in interest rates may also cause a corresponding
    decline in demand for equity investments, in general, and in
    particular for yield-based equity investments such as our common
    units. Any such reduction in demand for our common units
    resulting from other more attractive investment opportunities
    may cause the trading price of our common units to decline.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    credit and risk profile of our general partner and its owners
    could adversely affect our credit ratings and
    profile.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The credit and business risk profiles of our general partner or
    owners of our general partner may be factors in credit
    evaluations of us as a master limited partnership. This is
    because our general partner can exercise significant influence
    over our business activities, including our cash distributions
    and, acquisition strategy and business risk profile. Another
    factor that may be considered is the financial condition of our
    general partner and its owners, including the degree of their
    financial leverage and their dependence on cash flow from us to
    service their indebtedness.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    issue an unlimited number of limited partner interests without
    the consent of our unitholders, which will dilute your ownership
    interest in us and may increase the risk that we will not have
    sufficient available cash to maintain or increase our per unit
    distribution level.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement allows us to issue an unlimited number
    of additional limited partner interests, including securities
    senior to the common units, without the approval of our
    unitholders. The issuance of additional common units or other
    equity securities by us will have the following effects:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our unitholders&#146; current proportionate ownership interest
    in us will decrease;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount of cash available for distribution on each common
    unit or partnership security may decrease;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ratio of taxable income to distributions may increase;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the relative voting strength of each previously outstanding
    common unit may be diminished;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the market price of our common units may decline.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, ETP may sell an unlimited number of limited partner
    interests without the consent of its unitholders which will
    dilute existing interests of its unitholders, including us. The
    issuance of additional common units or other equity securities
    by ETP will have essentially the same effects as detailed above.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    market price of our common units could be adversely affected by
    sales of substantial amounts of our units in the public markets,
    including sales by our existing unitholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Sales by any of our existing unitholders of a substantial number
    of our units in the public markets, or the perception that such
    sales might occur, could have a material adverse effect on the
    price of our units or could impair our ability to obtain capital
    through an offering of equity securities. We do not know whether
    any such sales would be made in the public market or in private
    placements, nor do we know what impact such potential or actual
    sales would have on our unit price in the future.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Control
    of our general partner may be transferred to a third party
    without unitholder consent.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner may transfer its general partner interest in
    us to a third party in a merger or in a sale of its equity
    securities without the consent of our unitholders. Furthermore,
    there is no restriction in the partnership agreement on the
    ability of the members of our general partner to sell or
    transfer all or part of their ownership interest in our general
    partner to a third party. The new owner or owners of our general
    partner
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    7
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    would then be in a position to replace the directors and
    officers of our general partner and control the decisions made
    and actions taken by the board of directors and officers.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    general partner has only one executive officer, and we are
    dependent on third parties, including key personnel of ETP under
    a shared services agreement, to provide the financial,
    accounting, administrative and legal services necessary to
    operate our business.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    John W. McReynolds, the President and Chief Financial Officer of
    our general partner, is the only executive officer charged with
    managing our business other than through our shared services
    agreement with ETP. We do not currently have a plan for
    identifying a successor to Mr.&#160;McReynolds in the event that
    he retires, dies or becomes disabled. If Mr.&#160;McReynolds
    ceases to serve as the President and Chief Financial Officer of
    our general partner for any reason, we would be without
    executive management other than through our shared services
    agreement with ETP until one or more new executive officers are
    selected by the board of directors of our general partner. As a
    consequence, the loss of Mr.&#160;McReynolds&#146; services
    could have a material negative impact on the management of our
    business.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Moreover, we rely on the services of key personnel of ETP,
    including the ongoing involvement and continued leadership of
    Kelcy L. Warren, one of the founders of ETP&#146;s midstream
    business, as well as other key members of ETP&#146;s management
    team such as Mackie McCrea, President of Midstream Operations
    and R.C. Mills, President of Propane Operations. Mr.&#160;Warren
    has been integral to the success of ETP&#146;s midstream and
    transportation and storage businesses because of his ability to
    identify and develop strategic business opportunities. Losing
    his leadership could make it more difficult for ETP to identify
    internal growth projects and accretive acquisitions, which could
    have a material adverse effect on ETP&#146;s ability to increase
    the cash distributions paid on its partnership interests.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s executive officers that provide services to us
    pursuant to a shared services agreement allocate their time
    between us and ETP. To the extent that these officers face
    conflicts regarding the allocation of their time, we may not
    receive the level of attention from them that the management of
    our business requires. If ETP is unable to provide us with a
    sufficient number of personnel with the appropriate level of
    technical accounting and financial expertise, our internal
    accounting controls could be adversely impacted.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">An
    increase in interest rates may cause the market price of our
    units to decline.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Like all equity investments, an investment in our units is
    subject to certain risks. In exchange for accepting these risks,
    investors may expect to receive a higher rate of return than
    would otherwise be obtainable from lower-risk investments.
    Accordingly, as interest rates rise, the ability of investors to
    obtain higher risk-adjusted rates of return by purchasing
    government-backed debt securities may cause a corresponding
    decline in demand for riskier investments generally, including
    yield-based equity investments such as publicly traded limited
    partnership interests. Reduced demand for our units resulting
    from investors seeking other more favorable investment
    opportunities may cause the trading price of our units to
    decline.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Your
    liability as a limited partner may not be limited, and our
    unitholders may have to repay distributions or make additional
    contributions to us under limited circumstances.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a limited partner in a partnership organized under Delaware
    law, you could be held liable for our obligations to the same
    extent as a general partner if you participate in the
    &#147;control&#148; of our business. Our general partner
    generally has unlimited liability for the obligations of the
    partnership, except for those contractual obligations of the
    partnership that are expressly made without recourse to our
    general partner. Additionally, the limitations on the liability
    of holders of limited partner interests for the obligations of a
    limited partnership have not been clearly established in many
    jurisdictions in which we do business.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In some of the jurisdictions in which we do business, the
    applicable statutes do not define control, but do permit limited
    partners to engage in certain activities, including, among other
    actions, taking any action with respect to the dissolution of
    the partnership, the sale, exchange, lease or mortgage of any
    asset of the
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    8
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    partnership, the admission or removal of the general partner and
    the amendment of the partnership agreement. You could, however,
    be liable for any and all of our obligations as if you were a
    general partner if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a court or government agency determined that we were conducting
    business in a state but had not complied with that particular
    state&#146;s partnership statute;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    your right to act with other unitholders to take other actions
    under our partnership agreement is found to constitute
    &#147;control&#148; of our business.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under limited circumstances, our unitholders may have to repay
    amounts wrongfully distributed to them. Under
    <FONT style="white-space: nowrap">Section&#160;17-607</FONT>
    of the Delaware Revised Uniform Limited Partnership Act, neither
    Energy Transfer Equity nor ETP may make a distribution to its
    unitholders if the distribution would cause Energy Transfer
    Equity&#146;s or ETP&#146;s respective liabilities to exceed the
    fair value of their respective assets. Delaware law provides
    that for a period of three years from the date of the
    impermissible distribution, partners who received the
    distribution and knew at the time of the distribution that it
    violated Delaware law will be liable to the partnership for the
    distribution amount. Liabilities to partners on account of their
    partnership interest and liabilities that are non-recourse to
    the partnership are not counted for purposes of determining
    whether a distribution is permitted.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If in
    the future we cease to manage and control ETP, we may be deemed
    to be an investment company under the Investment Company Act of
    1940.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we cease to manage and control ETP and are deemed to be an
    investment company under the Investment Company Act of 1940, we
    would either have to register as an investment company under the
    Investment Company Act, obtain exemptive relief from the SEC or
    modify our organizational structure or our contract rights to
    fall outside the definition of an investment company.
    Registering as an investment company could, among other things,
    materially limit our ability to engage in transactions with
    affiliates, including the purchase and sale of certain
    securities or other property to or from our affiliates, restrict
    our ability to borrow funds or engage in other transactions
    involving leverage and require us to add additional directors
    who are independent of us or our affiliates.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If
    Energy Transfer Partners GP withdraws or is removed as
    ETP&#146;s general partner, then we would lose control over the
    management and affairs of Energy Transfer Partners, the risk
    that we would be deemed an investment company under the
    Investment Company Act of 1940 would be exacerbated and our
    indirect ownership of the general partner interests and 100% of
    the incentive distribution rights in ETP could be cashed out or
    converted into ETP common units at an unattractive
    valuation.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the terms of ETP&#146;s partnership agreement, ETP GP will
    be deemed to have withdrawn as general partner if, among other
    things, it:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    voluntarily withdraws from the partnership by giving notice to
    the other partners;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    transfers all, but not less than all, of its partnership
    interests to another entity in accordance with the terms of
    ETP&#146;s partnership agreement;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    makes a general assignment for the benefit of creditors, files a
    voluntary bankruptcy petition, seeks to liquidate, acquiesces in
    the appointment of a trustee, receiver or liquidator, or becomes
    subject to an involuntary bankruptcy petition;&#160;or
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    dissolves itself under Delaware law without reinstatement within
    the requisite period.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, ETP GP can be removed as ETP&#146;s general partner
    if that removal is approved by unitholders holding at least
    66<FONT style="vertical-align: top; font-size: 70&#37;">2</FONT>/<FONT style="font-size: 70&#37;">3</FONT>%
    of ETP&#146;s outstanding units (including units held by ETP GP
    and its affiliates).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If ETP GP withdraws from being ETP&#146;s general partner in
    compliance with ETP&#146;s partnership agreement or is removed
    from being ETP&#146;s general partner under circumstances not
    involving a final adjudication of actual fraud, gross negligence
    or willful and wanton misconduct, it may require the successor
    general partner to purchase its general partner interests,
    incentive distribution rights and limited partner interests in
    ETP for fair market value. If ETP GP withdraws from being
    ETP&#146;s general partner in violation of ETP&#146;s
    partnership agreement or is removed from being ETP&#146;s
    general partner in circumstances where a court enters a judgment
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    9
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    that cannot be appealed finding it liable for actual fraud,
    gross negligence or willful or wanton misconduct in its capacity
    as ETP&#146;s general partner, and the successor general partner
    does not exercise its option to purchase the general partner
    interests, incentive distribution rights and limited partner
    interests held by ETP GP in ETP for fair market value, then the
    general partner interests and incentive distribution rights held
    by ETP GP in ETP could be converted into limited partner
    interests pursuant to a valuation performed by an investment
    banking firm or other independent expert. Under any of the
    foregoing scenarios, ETP GP would lose control over the
    management and affairs of ETP, thereby increasing the risk that
    we would be deemed an investment company subject to regulation
    under the Investment Company Act of 1940. In addition, our
    indirect ownership of the general partner interests and 100% of
    the incentive distribution rights in ETP, to which a significant
    portion of the value of our common units is currently
    attributable, could be cashed out or converted into ETP common
    units at an unattractive valuation.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    partnership agreement restricts the rights of unitholders owning
    20% or more of our units.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our unitholders&#146; voting rights are restricted by the
    provision in our partnership agreement generally providing that
    any units held by a person that owns 20% or more of any class of
    units then outstanding, other than our general partner and its
    affiliates, cannot be voted on any matter. In addition, our
    partnership agreement contains provisions limiting the ability
    of our unitholders to call meetings or to acquire information
    about our operations, as well as other provisions limiting our
    unitholders&#146; ability to influence the manner or direction
    of our management. As a result, the price at which our common
    units will trade may be lower because of the absence or
    reduction of a takeover premium in the trading price.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Future
    sales of the ETP common units we own or other limited partner
    interests in the public market could reduce the market price of
    our unitholders&#146; limited partner interests.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of May&#160;31, 2007, we owned approximately
    62.5&#160;million common units of ETP. If we were to sell
    <FONT style="white-space: nowrap">and/or</FONT>
    distribute any ETP common units to the holders of our equity
    interests in the future, those holders may dispose of some or
    all of these units. The sale or disposition of a substantial
    portion of these units in the public markets could reduce the
    market price of ETP&#146;s outstanding common units and our
    receipt of distributions.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Cost
    reimbursements due to our general partner may be substantial and
    may reduce our ability to pay the distributions to our
    unitholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to making any distributions to our unitholders, we will
    reimburse our general partner for all expenses it has incurred
    on our behalf. In addition, our general partner and its
    affiliates may provide us with services for which we will be
    charged reasonable fees as determined by our general partner.
    The reimbursement of these expenses and the payment of these
    fees could adversely affect our ability to make distributions to
    our unitholders. Our general partner has sole discretion to
    determine the amount of these expenses and fees.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, under Delaware partnership law, our general partner
    has unlimited liability for our obligations, such as our debts
    and environmental liabilities, except for our contractual
    obligations that are expressly made without recourse to our
    general partner. To the extent our general partner incurs
    obligations on our behalf, we are obligated to reimburse or
    indemnify it. If we are unable or unwilling to reimburse or
    indemnify our general partner, our general partner may take
    actions to cause us to make payments of these obligations and
    liabilities. Any such payments could reduce the amount of cash
    available for distribution to our unitholders and cause the
    value of our common units to decline.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">An
    impairment of goodwill and intangible assets could reduce our
    earnings.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At May&#160;31, 2007, our consolidated balance sheet reflected
    $746&#160;million of goodwill and $432&#160;million of
    intangible assets. Goodwill is recorded when the purchase price
    of a business exceeds the fair market value of the tangible and
    separately measurable intangible net assets. Accounting
    principles generally accepted in the United States require us to
    test goodwill for impairment on an annual basis or when events
    or circumstances occur indicating that goodwill might be
    impaired. Long-lived assets such as intangible assets with
    finite useful lives are reviewed for impairment whenever events
    or changes in circumstances indicate that the carrying amount
    may not be recoverable. If we determine that any of our goodwill
    or intangible assets were impaired,
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    10
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    we would be required to take an immediate charge to earnings
    with a correlative effect on partners&#146; equity and balance
    sheet leverage as measured by debt to total capitalization.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to Conflicts of Interest</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Although
    we control ETP through our ownership of its general partner,
    ETP&#146;s general partner owes fiduciary duties to ETP and
    ETP&#146;s unitholders, which may conflict with our
    interests.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Conflicts of interest exist and may arise in the future as a
    result of the relationships between us and our affiliates,
    including ETP&#146;s general partner, on the one hand, and ETP
    and its limited partners, on the other hand. The directors and
    officers of ETP&#146;s general partner have fiduciary duties to
    manage ETP in a manner beneficial to us, its owner. At the same
    time, the general partner has a fiduciary duty to manage ETP in
    a manner beneficial to ETP and its limited partners. The board
    of directors of ETP&#146;s general partner will resolve any such
    conflict and has broad latitude to consider the interests of all
    parties to the conflict. The resolution of these conflicts may
    not always be in our best interest or that of our unitholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For example, conflicts of interest may arise in the following
    situations:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the allocation of shared overhead expenses to ETP and us;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the interpretation and enforcement of contractual obligations
    between us and our affiliates, on the one hand, and ETP, on the
    other hand;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the determination of the amount of cash to be distributed to
    ETP&#146;s partners and the amount of cash to be reserved for
    the future conduct of ETP&#146;s business;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the determination of whether to make borrowings under ETP&#146;s
    revolving working capital facility to pay distributions to
    ETP&#146;s partners;&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any decision we make in the future to engage in business
    activities independent of ETP.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    fiduciary duties of our general partner&#146;s officers and
    directors may conflict with those of ETP&#146;s general
    partner.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Conflicts of interest may arise because of the relationships
    between ETP&#146;s general partner, ETP and us. Our general
    partner&#146;s directors and officers have fiduciary duties to
    manage our business in a manner beneficial to us and our
    unitholders. Some of our general partner&#146;s directors are
    also directors and officers of ETP&#146;s general partner, and
    have fiduciary duties to manage the business of ETP in a manner
    beneficial to ETP and ETP&#146;s unitholders. The resolution of
    these conflicts may not always be in our best interest or that
    of our unitholders.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    risk of competition with affiliates of our general partner has
    increased.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement provides that our general partner will
    be restricted from engaging in any business activities other
    than acting as our general partner and those activities
    incidental to its ownership of interests in us. Except as
    provided in our Partnership Agreement, affiliates of our general
    partner are not prohibited from engaging in other businesses or
    activities, including those that might be in direct competition
    with us. On May&#160;7, 2007, Enterprise GP Holdings L.P.
    acquired a 34.9% non-controlling equity interest in our general
    partner. Enterprise GP Holdings L.P. and its subsidiaries are a
    North American midstream energy business. As a result, there is
    greater risk that competition with affiliates of our general
    partner could occur, which could adversely impact our results of
    operations and cash available for distribution.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Potential
    conflicts of interest may arise among our general partner, its
    affiliates and us. Our general partner and its affiliates have
    limited fiduciary duties to us and our unitholders, which may
    permit them to favor their own interests to the detriment of us
    and our unitholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Conflicts of interest may arise among our general partner and
    its affiliates, on the one hand, and us and our unitholders, on
    the other hand. As a result of these conflicts, our general
    partner may favor its own
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    11
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    interests and the interests of its affiliates over the interests
    of our unitholders. These conflicts include, among others, the
    following:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our general partner is allowed to take into account the
    interests of parties other than us, including ETP and its
    affiliates and any general partners and limited partnerships
    acquired in the future, in resolving conflicts of interest,
    which has the effect of limiting its fiduciary duties to our
    unitholders.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our general partner has limited its liability and reduced its
    fiduciary duties under the terms of our partnership agreement,
    while also restricting the remedies available to our unitholders
    for actions that, without these limitations, might constitute
    breaches of fiduciary duty. As a result of purchasing our units,
    unitholders consent to various actions and conflicts of interest
    that might otherwise constitute a breach of fiduciary or other
    duties under applicable state law.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our general partner determines the amount and timing of our
    investment transactions, borrowings, issuances of additional
    partnership securities and reserves, each of which can affect
    the amount of cash that is available for distribution to our
    unitholders.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our general partner determines which costs it and its affiliates
    have incurred are reimbursable by us.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our partnership agreement does not restrict our general partner
    from causing us to pay it or its affiliates for any services
    rendered, or from entering into additional contractual
    arrangements with any of these entities on our behalf, so long
    as the terms of any such payments or additional contractual
    arrangements are fair and reasonable to us.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our general partner controls the enforcement of obligations owed
    to us by it and its affiliates.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our general partner decides whether to retain separate counsel,
    accountants or others to perform services for us.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    partnership agreement limits our general partner&#146;s
    fiduciary duties to us and our unitholders and restricts the
    remedies available to our unitholders for actions taken by our
    general partner that might otherwise constitute breaches of
    fiduciary duty.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement contains provisions that reduce the
    standards to which our general partner would otherwise be held
    by state fiduciary duty law. For example, our partnership
    agreement:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    permits our general partner to make a number of decisions in its
    individual capacity, as opposed to in its capacity as our
    general partner. This entitles our general partner to consider
    only the interests and factors that it desires, and it has no
    duty or obligation to give any consideration to any interest of,
    or factors affecting, us, our affiliates or any limited partner;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provides that our general partner is entitled to make other
    decisions in &#147;good faith&#148; if it reasonably believes
    that the decisions are in our best interests;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    generally provides that affiliated transactions and resolutions
    of conflicts of interest not approved by the audit and conflicts
    committee of the board of directors of our general partner and
    not involving a vote of unitholders must be on terms no less
    favorable to us than those generally being provided to or
    available from unrelated third parties or be &#147;fair and
    reasonable&#148; to us and that, in determining whether a
    transaction or resolution is &#147;fair and reasonable,&#148;
    our general partner may consider the totality of the
    relationships among the parties involved, including other
    transactions that may be particularly advantageous or beneficial
    to us;&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provides that our general partner and its officers and directors
    will not be liable for monetary damages to us, our limited
    partners or assignees for any acts or omissions unless there has
    been a final and non-appealable judgment entered by a court of
    competent jurisdiction determining that the general partner or
    those other persons acted in bad faith or engaged in fraud,
    willful misconduct or gross negligence.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to become a limited partner of our partnership, our
    unitholders are required to agree to be bound by the provisions
    in the partnership agreement, including the provisions discussed
    above.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    12
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    general partner has a limited call right that may require you to
    sell your units at an undesirable time or price.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If at any time our general partner and its affiliates own more
    than 90% of our outstanding units, our general partner will have
    the right, but not the obligation, which it may assign to any of
    its affiliates or to us, to acquire all, but not less than all,
    of the units held by unaffiliated persons at a price not less
    than their then-current market price. As a result, you may be
    required to sell your units at an undesirable time or price and
    may not receive any return on your investment. You may also
    incur a tax liability upon a sale of your units. As of
    May&#160;31, 2007, affiliates of our general partner, excluding
    Enterprise GP Holdings L.P., own approximately 37.4% of our
    common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We own
    an interstate pipeline that is subject to rate regulation by the
    Federal Energy Regulatory Commission and, in the event that 15%
    or more of our outstanding common units, in the aggregate, are
    held by persons who are not eligible holders, common units held
    by persons who are not eligible holders will be subject to the
    possibility of redemption at the then-current market
    price.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We own an interstate pipeline that is subject to rate regulation
    of the Federal Energy Regulatory Commission, or FERC, and as a
    result our general partner has the right under our partnership
    agreement to institute procedures, by giving notice to each of
    our unitholders, that would require transferees of common units
    and, upon the request of our general partner, existing holders
    of our common units to certify that they are Eligible Holders.
    The purpose of these certification procedures would be to enable
    us to utilize a federal income tax expense as a component of the
    pipeline&#146;s rate base upon which tariffs may be established
    under FERC rate-making policies applicable to entities that
    pass-through their taxable income to their owners. Eligible
    Holders are individuals or entities subject to United States
    federal income taxation on the income generated by us or
    entities not subject to United States federal income taxation on
    the income generated by us, so long as all of the entity&#146;s
    owners are subject to such taxation. If these tax certification
    procedures are implemented and 15% or more of our outstanding
    common units are held by persons who are not Eligible Holders,
    we will have the right to redeem the units held by persons who
    are not Eligible Holders at the then-current market price. The
    redemption price would be paid in cash or by delivery of a
    promissory note, as determined by our general partner.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP
    may issue additional ETP units, which may increase the risk that
    ETP will not have sufficient Available Cash to maintain or
    increase its per unit distribution level.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP has wide latitude to issue additional units on terms and
    conditions established by its general partner. The payment of
    distributions on those additional units may increase the risk
    that ETP may not have sufficient cash available to maintain or
    increase its per unit distribution level, which in turn may
    impact the available cash that we have to distribute to our
    unitholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The issuance of additional common units or other equity
    securities of equal rank will have the following effects:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our unitholders&#146; proportionate ownership interest in ETP
    will decrease;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount of cash available for distribution on each common
    unit may decrease;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the market price of our common units may decline.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, our partnership agreement does not give our
    unitholders the right to approve our issuance of equity
    securities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to Energy Transfer Partners&#146; Business</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Since our cash flows consist exclusively of distributions from
    ETP, risks to ETP&#146;s business are also risks to us. We have
    set forth below risks to ETP&#146;s business, the occurrence of
    which could have a negative impact on ETP&#146;s financial
    performance and decrease the amount of cash it is able to
    distribute to us, thereby impacting the amount of cash that we
    are able to distribute to our unitholders.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    13
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    profitability of ETP&#146;s midstream and transportation and
    storage businesses is, to an extent, dependent upon natural gas
    commodity prices, price spreads between two or more physical
    locations and market demand for natural gas and NGLs, which are
    factors beyond ETP&#146;s control and have been
    volatile.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Income from ETP&#146;s midstream, transportation and storage
    business is exposed to risks due to fluctuations in commodity
    prices. For a portion of the natural gas gathered at the
    Southeast Texas System, the North Texas System, and at
    ETP&#146;s Houston Pipe Line System, ETP purchases natural gas
    from producers at the wellhead at a price that is at a discount
    to a specified index price and then gathers and delivers the
    natural gas to pipelines where ETP typically resells the natural
    gas at the index price. Generally, the gross margins ETP
    realizes under these discount-to-index arrangements decrease in
    periods of low natural gas prices because these gross margins
    are based on a percentage of the index price.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For a portion of the natural gas gathered at the Southeast Texas
    System and North Texas System, ETP enters into
    percentage-of-proceeds arrangements and keep-whole arrangements,
    pursuant to which ETP agrees to gather and process natural gas
    received from the producers. Under percentage-of-proceeds
    arrangements, ETP generally sells the residue gas and NGLs at
    market prices and remits to the producers an agreed upon
    percentage of the proceeds based on an index price. In other
    cases, instead of remitting cash payments to the producer, ETP
    delivers an agreed upon percentage of the residue gas and NGL
    volumes to the producer and sells the volumes it keeps to third
    parties at market prices. Under these arrangements, ETP&#146;s
    revenues and gross margins decline when natural gas prices and
    NGL prices decrease. Accordingly, a decrease in the price of
    natural gas or NGLs could have an adverse effect on ETP&#146;s
    results of operations. Under keep-whole arrangements, ETP
    generally sells the NGLs produced from its gathering and
    processing operations to third parties at market prices. Because
    the extraction of the NGLs from the natural gas during
    processing reduces the Btu content of the natural gas, ETP must
    either purchase natural gas at market prices for return to
    producers or make a cash payment to producers equal to the value
    of this natural gas. Under these arrangements, ETP&#146;s
    revenues and gross margins decrease when the price of natural
    gas increases relative to the price of NGLs if ETP is not able
    to bypass its processing plants and sell the unprocessed natural
    gas.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the past, the prices of natural gas and NGLs have been
    extremely volatile, and ETP expects this volatility to continue.
    For example, during the nine months ended May&#160;31, 2007, the
    NYMEX settlement price for the prompt month contract ranged from
    a high of $8.87 per&#160;million British thermal units, or
    MMBtu, to a low of $4.20 per MMBtu. A composite of the Mt.
    Belvieu average NGLs price based upon ETP&#146;s average NGLs
    composition during the nine months ended May&#160;31, 2007
    ranged from a high of approximately $1.08 per gallon to a low of
    approximately $0.83 per gallon.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s average realized natural gas sales prices for the
    nine months ended May&#160;31, 2007 were lower than ETP&#146;s
    historical realized natural gas prices. For example, ETP&#146;s
    average realized natural gas price decreased $1.88, or 24%, from
    $8.00 per MMBtu for the year ended August&#160;31, 2006 to $6.12
    per MMBtu for the nine months ended May&#160;31, 2007. On
    August&#160;14, 2007, the NYMEX settlement price for September
    2007 natural gas deliveries was $6.94 per MMBtu, which was 13.4%
    higher than ETP&#146;s average natural gas price for the nine
    months ended May&#160;31, 2007. Natural gas prices are subject
    to significant fluctuations, and ETP cannot assure you that
    natural gas prices will remain at the high levels recently
    experienced. ETP&#146;s Oasis Pipeline, East Texas Pipeline
    System, ET Fuel System and Houston Pipe Line System receive fees
    for transporting natural gas for its customers. Although a
    significant amount of the pipeline capacity of the East Texas
    Pipeline System and various pipeline segments of the ET Fuel
    System is committed under long-term fee-based contracts, the
    remaining capacity of ETP&#146;s transportation pipelines is
    subject to fluctuation in demand based on the markets and prices
    for natural gas and NGLs, which factors may result in decisions
    by natural gas producers to reduce production of natural gas
    during periods of lower prices for natural gas and NGLs or may
    result in decisions by end users of natural gas and NGLs to
    reduce consumption of these fuels during periods of higher
    prices for these fuels. ETP&#146;s fuel retention fees are also
    directly impacted by changes in natural gas prices. Increases in
    natural gas prices tend to increase ETP&#146;s fuel retention
    fees, and decreases in natural gas prices tend to decrease its
    fuel retention fees.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    14
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The markets and prices for natural gas and NGLs depend upon
    factors beyond ETP&#146;s control. These factors include demand
    for oil, natural gas and NGLs, which fluctuate with changes in
    market and economic conditions, and other factors, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the impact of weather on the demand for oil and natural gas;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of domestic oil and natural gas production;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the availability of imported oil and natural gas;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    actions taken by foreign oil and gas producing nations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the availability of local, intrastate and interstate
    transportation systems;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the price, availability and marketing of competitive fuels;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the demand for electricity;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the impact of energy conservation efforts;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the extent of governmental regulation and taxation.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    use of derivative financial instruments could result in material
    financial losses by ETP.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    From time to time, ETP has sought to limit a portion of the
    adverse effects resulting from changes in natural gas and other
    commodity prices and interest rates by using derivative
    financial instruments and other hedging mechanisms and by the
    activities ETP conducts in its trading operations. To the extent
    that ETP hedges its commodity price and interest rate exposures,
    it foregoes the benefits it would otherwise experience if
    commodity prices or interest rates were to change in ETP&#146;s
    favor. In addition, even though monitored by management,
    ETP&#146;s hedging and trading activities can result in losses.
    Such losses could occur under various circumstances, including
    if a counterparty does not perform its obligations under the
    hedge arrangement, the hedge is imperfect, or hedging policies
    and procedures are not followed.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    success depends upon our ability to continually contract for new
    sources of natural gas supply.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to maintain or increase throughput levels on ETP&#146;s
    gathering and transportation pipeline systems and asset
    utilization rates at its treating and processing plants, ETP
    must continually contract for new natural gas supplies and
    natural gas transportation services. ETP may not be able to
    obtain additional contracts for natural gas supplies for its
    natural gas gathering systems, and it may be unable to maintain
    or increase the levels of natural gas throughput on its
    transportation pipelines. The primary factors affecting
    ETP&#146;s ability to connect new supplies of natural gas to its
    gathering systems include its success in contracting for
    existing natural gas supplies that are not committed to other
    systems and the level of drilling activity and production of
    natural gas near ETP&#146;s gathering systems or in areas that
    provide access to its transportation pipelines or markets to
    which its systems connect. The primary factors affecting
    ETP&#146;s ability to attract customers to its transportation
    pipelines consist of its access to other natural gas pipelines,
    natural gas markets, natural gas-fired power plants and other
    industrial end-users and the level of drilling and production of
    natural gas in areas connected to these pipelines and systems.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Fluctuations in energy prices can greatly affect production
    rates and investments by third parties in the development of new
    oil and natural gas reserves. Drilling activity and production
    generally decrease as oil and natural gas prices decrease. ETP
    has no control over the level of drilling activity in its areas
    of operation, the amount of reserves underlying the wells and
    the rate at which production from a well will decline, sometimes
    referred to as the &#147;decline rate.&#148; In addition, ETP
    has no control over producers or their production decisions,
    which are affected by, among other things, prevailing and
    projected energy prices, demand for hydrocarbons, the level of
    reserves, geological considerations, governmental regulation and
    the availability and cost of capital.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A substantial portion of ETP&#146;s assets, including its
    gathering systems and its processing and treating plants, are
    connected to natural gas reserves and wells for which the
    production will naturally decline over
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    15
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    time. Accordingly, ETP&#146;s cash flows will also decline
    unless it is able to access new supplies of natural gas by
    connecting additional production to these systems.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s transportation pipelines are also dependent upon
    natural gas production in areas served by its pipelines or in
    areas served by other gathering systems or transportation
    pipelines that connect with its transportation pipelines. A
    material decrease in natural gas production in ETP&#146;s areas
    of operation or in other areas that are connected to ETP&#146;s
    areas of operation by third party gathering systems or
    pipelines, as a result of depressed commodity prices or
    otherwise, would result in a decline in the volume of natural
    gas ETP handles, which would reduce ETP&#146;s revenues and
    operating income. In addition, ETP&#146;s future growth will
    depend, in part, upon whether it can contract for additional
    supplies at a greater rate than the natural decline rate in
    ETP&#146;s currently connected supplies.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Transwestern derives a significant portion of its revenue from
    charges to its customers for reservation of capacity, which
    charges Transwestern receives regardless of whether these
    customers actually use the reserved capacity. Transwestern also
    generates revenue from transportation of natural gas for
    customers without reserved capacity. As the reserves available
    through the supply basins connected to Transwestern&#146;s
    systems naturally decline, a decrease in development or
    production activity could cause a decrease in the volume of
    natural gas available for transmission or a decrease in the
    demand for natural gas transportation on the Transwestern system
    in the long run. Investments by third parties in the development
    of new natural gas reserves connected to Transwestern&#146;s
    facilities depend on many factors beyond Transwestern&#146;s
    control.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The volumes of natural gas ETP transports on its pipelines may
    be reduced in the event that the prices at which natural gas is
    purchased and sold at the Waha Hub, the Katy Hub, the Carthage
    Hub and the Houston Ship Channel Hub, the four major natural gas
    trading hubs served by ETP&#146;s pipelines, become unfavorable
    in relation to prices for natural gas at other natural gas
    trading hubs or in other markets as customers may elect to
    transport their natural gas to these other hubs or markets using
    pipelines other than those ETP operates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP
    may not be able to fully execute its growth strategy if it
    encounters illiquid capital markets or increased competition for
    qualified assets.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s strategy contemplates growth through the development
    and acquisition of a wide range of midstream, transportation,
    storage, propane and other energy infrastructure assets while
    maintaining a strong balance sheet. This strategy includes
    constructing and acquiring additional assets and businesses to
    enhance its ability to compete effectively and diversify its
    asset portfolio, thereby providing more stable cash flow. ETP
    regularly considers and enters into discussions regarding, and
    are currently contemplating, the acquisition of additional
    assets and businesses, stand alone development projects or other
    transactions that ETP believes will present opportunities to
    realize synergies and increase its cash flow.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Consistent with ETP&#146;s acquisition strategy, management is
    continuously engaged in discussions with potential sellers
    regarding the possible acquisition of additional assets or
    businesses. Such acquisition efforts may involve ETP
    management&#146;s participation in processes that involve a
    number of potential buyers, commonly referred to as
    &#147;auction&#148; processes, as well as situations in which
    ETP believes it is the only party or one of a very limited
    number of potential buyers in negotiations with the potential
    seller. ETP cannot provide assurance that its current or future
    acquisition efforts will be successful or that any such
    acquisition will be completed on terms considered favorable to
    ETP.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, ETP is experiencing increased competition for the
    assets it purchases or contemplates purchasing. Increased
    competition for a limited pool of assets could result in ETP
    losing to other bidders more often or acquiring assets at higher
    prices. Either occurrence would limit ETP&#146;s ability to
    fully execute its growth strategy. Inability to execute its
    growth strategy may materially adversely impact the market price
    of ETP&#146;s securities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If ETP
    does not make acquisitions on economically acceptable terms, its
    future growth could be limited.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s results of operations and its ability to grow and to
    increase distributions to unitholders will depend, in part, on
    its ability to make acquisitions that are accretive to
    ETP&#146;s distributable cash flow per unit.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    16
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP may be unable to make accretive acquisitions for any of the
    following reasons, among others:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    because ETP is unable to identify attractive acquisition
    candidates or negotiate acceptable purchase contracts with them;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    because ETP is unable to raise financing for such acquisitions
    on economically acceptable terms;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    because ETP is outbid by competitors, some of which are
    substantially larger than ETP and have greater financial
    resources and lower costs of capital then it does.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, even if ETP consummates acquisitions that it
    believes will be accretive, those acquisitions may in fact
    adversely affect its results of operations or result in a
    decrease in distributable cash flow per unit. Any acquisition
    involves potential risks, including the risk that ETP may:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fail to realize anticipated benefits, such as new customer
    relationships, cost-savings or cash flow enhancements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    decrease its liquidity by using a significant portion of its
    available cash or borrowing capacity to finance acquisitions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    significantly increase its interest expense or financial
    leverage if ETP incurs additional debt to finance acquisitions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    encounter difficulties operating in new geographic areas or new
    lines of business;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    incur or assume unanticipated liabilities, losses or costs
    associated with the business or assets acquired for which ETP is
    not indemnified or for which the indemnity is inadequate;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    be unable to hire, train or retrain qualified personnel to
    manage and operate its growing business and assets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    less effectively manage its historical assets, due to the
    diversion of ETP management&#146;s attention from other business
    concerns;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    incur other significant charges, such as impairment of goodwill
    or other intangible assets, asset devaluation or restructuring
    charges.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If ETP consummates future acquisitions, its capitalization and
    results of operations may change significantly. As ETP
    determines the application of its funds and other resources, you
    will not have an opportunity to evaluate the economics,
    financial and other relevant information that ETP will consider.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If ETP
    does not continue to construct new pipelines, its future growth
    could be limited.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the past several years, ETP has constructed several new
    pipelines, and ETP is currently involved in constructing several
    new pipelines. ETP&#146;s results of operations and its ability
    to grow and to increase distributable cash flow per unit will
    depend, in part, on its ability to construct pipelines that are
    accretive to ETP&#146;s distributable cash flow. ETP may be
    unable to construct pipelines that are accretive to
    distributable cash flow for any of the following reasons, among
    others:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    ETP is unable to identify pipeline construction opportunities
    with favorable projected financial returns;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    ETP is unable to raise financing for its identified pipeline
    construction opportunities;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    ETP is unable to secure sufficient natural gas transportation
    commitments from potential customers due to competition from
    other pipeline construction projects or for other reasons.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, even if ETP constructs a pipeline that it believes
    will be accretive, the pipeline may in fact adversely affect its
    results of operations or results from those projected prior to
    commencement of construction and other factors.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    17
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Expanding
    ETP&#146;s business by constructing new pipelines and treating
    and processing facilities subjects it to risks.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    One of the ways that ETP has grown its business is through the
    construction of additions to its existing gathering,
    compression, treating, processing and transportation systems.
    The construction of a new pipeline or the expansion of an
    existing pipeline, by adding additional compression capabilities
    or by adding a second pipeline along an existing pipeline, and
    the construction of new processing or treating facilities,
    involve numerous regulatory, environmental, political and legal
    uncertainties beyond ETP&#146;s control and require the
    expenditure of significant amounts of capital that ETP will be
    required to finance through borrowings, the issuance of
    additional equity or from operating cash flow. If ETP undertakes
    these projects, they may not be completed on schedule or at all
    or at the budgeted cost. Moreover, ETP&#146;s revenues may not
    increase immediately following the completion of particular
    projects. For instance, if ETP builds a new pipeline, the
    construction will occur over an extended period of time, but ETP
    may not materially increase its revenues until long after the
    project&#146;s completion. Moreover, ETP may construct
    facilities to capture anticipated future growth in production in
    a region in which such growth does not materialize. As a result,
    new facilities may be unable to attract enough throughput or
    contracted capacity reservation commitments to achieve
    ETP&#146;s expected investment return, which could adversely
    affect its results of operations and financial condition. As a
    result, the success of a pipeline construction project will
    likely depend upon the level of natural gas exploration and
    development drilling activity and the demand for pipeline
    transportation in the areas proposed to be serviced by the
    project as well as ETP&#146;s ability to obtain commitments from
    producers in this area to utilize the newly constructed
    pipelines.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP
    depends on certain key producers for its supply of natural gas
    on the Southeast Texas System and North Texas System, and the
    loss of any of these key producers could adversely affect its
    financial results.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For ETP&#146;s nine months ended May&#160;31, 2007, Anadarko
    E&#038;P Company, LP, Southern Bay Operating, LLC and Chesapeake
    Energy Corp. supplied ETP with approximately 52% of the
    Southeast Texas System&#146;s natural gas supply. For ETP&#146;s
    nine months ended May&#160;31, 2007, Encana Oil and Gas (USA),
    Inc., XTO Energy Inc., and Chesapeake Energy Marketing, Inc.
    supplied ETP with approximately 58% of the North Texas
    System&#146;s natural gas supply. ETP is not the only option
    available to these producers for disposition of the natural gas
    they produce. To the extent that these and other producers may
    reduce the volumes of natural gas that they supply ETP, ETP
    would be adversely affected unless it was able to acquire
    comparable supplies of natural gas from other producers.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP
    depends on key customers to transport natural gas on its ETC
    Katy Pipeline System, ET Fuel System and HPL
    System.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP has nine- and ten-year fee-based transportation contracts
    with XTO Energy, Inc. pursuant to which XTO Energy has committed
    to transport certain minimum volumes of natural gas on
    ETP&#146;s pipelines. ETP also has an eight-year fee-based
    transportation contract with TXU Portfolio Management Company,
    L.P., a subsidiary of TXU Corp., which is referred to as TXU
    Shipper, to transport natural gas on the ET Fuel System to
    TXU&#146;s electric generating power plants. ETP has also
    entered into two eight-year natural gas storage contracts with
    TXU Shipper to store natural gas at the two natural gas storage
    facilities that are part of the ET Fuel System. Each of the
    contracts with TXU Shipper may be extended by TXU Shipper for
    two additional five-year terms. The failure of XTO Energy or TXU
    Shipper to fulfill their contractual obligations under these
    contracts could have a material adverse effect on ETP&#146;s
    cash flow and results of operations if ETP was not able to
    replace these customers under arrangements that provide similar
    economic benefits as these existing contracts.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP completed its 42&#148; pipeline expansion to Carthage in
    April 2007. The major shippers through the 42&#148; pipeline
    expansion to interstate and intrastate markets are XTO Energy,
    Inc., EOG Resources, Inc., Chesapeake Energy Marketing, Inc.,
    Encana Marketing (USA), Inc. Quicksilver Resources, Inc. and
    Leor Energy, L.P. These shippers have long-term contracts
    ranging from five to 10&#160;years. The failure of these
    shippers to fulfill their contractual obligations could have a
    material adverse effect on ETP&#146;s cash flow and results of
    operations
</DIV>

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    <BR>
    18
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    if ETP was not able to replace these customers under
    arrangements that provide similar economic benefits as these
    existing contracts.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Federal,
    state or local regulatory measures could adversely affect
    ETP&#146;s business.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s natural gas gathering and intrastate transportation
    activities are generally exempt from Federal Energy Regulatory
    Commission, or FERC, regulation under the Natural Gas Act of
    1938, or NGA, but FERC regulation still significantly affects
    ETP&#146;s business and the market for its products. The rates,
    terms and conditions of some of the transportation and storage
    services ETP provides on the Houston Pipe Line, the ETC Katy
    Pipeline, the Oasis Pipeline and the ET Fuel System are subject
    to FERC regulation under Section&#160;311 of the Natural Gas
    Policy Act, or NGPA. Under Section&#160;311, rates charged for
    transportation and storage must be fair and equitable amounts.
    Amounts collected in excess of fair and equitable rates are
    subject to refund with interest, and the terms and conditions of
    service, set forth in the pipeline&#146;s Statement of Operating
    Conditions, are subject to FERC approval. Failure to observe the
    service limitations applicable to storage and transportation
    service under Section&#160;311, failure to comply with the rates
    approved by FERC for Section&#160;311 service, and failure to
    comply with the terms and conditions of service established in
    the pipeline&#146;s FERC-approved Statement of Operating
    Conditions could result in an alteration of jurisdictional
    status
    <FONT style="white-space: nowrap">and/or</FONT> the
    imposition of administrative, civil and criminal penalties.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s intrastate natural gas transportation and storage
    facilities are subject to state regulation in Texas, New Mexico,
    Arizona, Oklahoma, Louisiana, Utah and Colorado, the states in
    which ETP operates these types of pipelines. ETP&#146;s
    intrastate transportation facilities located in Texas are
    subject to regulation as common purchasers and as gas utilities
    by the Texas Railroad Commission, or TRRC. The TRRC&#146;s
    jurisdiction extends to both rates and pipeline safety. The
    rates ETP charges for transportation and storage services are
    deemed just and reasonable under Texas law unless challenged in
    a complaint. Should a complaint be filed or should regulation
    become more active, ETP&#146;s business may be adversely
    affected.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s midstream gathering, processing and intrastate
    transportation operations are also subject to ratable take and
    common purchaser statutes in Texas, New&#160;Mexico, Arizona,
    Oklahoma, Louisiana, Utah and Colorado, the states where ETP
    operates. Ratable take statutes generally require gatherers to
    take, without undue discrimination, natural gas production that
    may be tendered to the gatherer for handling. Similarly, common
    purchaser statutes generally require gatherers to purchase
    without undue discrimination as to source of supply or producer.
    These statutes have the effect of restricting ETP&#146;s right
    as an owner of gathering facilities to decide with whom it
    contracts to purchase or transport natural gas. Federal law
    leaves any economic regulation of natural gas gathering to the
    states, and some of the states in which ETP operates have
    adopted complaint-based or other limited economic regulation of
    natural gas gathering activities. States in which ETP operates
    that have adopted some form of complaint-based regulation, like
    Texas, generally allow natural gas producers and shippers to
    file complaints with state regulators in an effort to resolve
    grievances relating to natural gas gathering rates and access.
    Other state and local regulations also affect ETP&#146;s
    business.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s storage facilities are also subject to the
    jurisdiction of the TRRC. Generally, the TRRC has jurisdiction
    over all underground storage of natural gas in Texas, unless the
    facility is part of an interstate gas pipeline facility. Because
    the ET Fuel System and the Houston Pipe Line System natural gas
    storage facilities are only connected to intrastate gas
    pipelines, they fall within the TRRC&#146;s jurisdiction and
    must be operated pursuant to TRRC permit. Certain changes in
    ownership or operation of TRCC-jurisdictional storage
    facilities, such as facility expansions and increases in the
    maximum operating pressure, must be approved by the TRRC through
    an amendment to the facility&#146;s existing permit. In
    addition, the TRRC must approve transfers of the permits. The
    Texas laws and regulations also require all natural gas storage
    facilities to be operated to prevent waste, the uncontrolled
    escape of gas, pollution and danger to life or property.
    Accordingly, the TRRC requires natural gas storage facilities to
    implement certain safety, monitoring, reporting and
    record-keeping measures. Violations of the terms and provisions
    of a TRRC permit or a TRRC order or regulation can result in the
    modification, cancellation or suspension of an operating permit
    <FONT style="white-space: nowrap">and/or</FONT> civil
    penalties, injunctive relief, or both.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The states in which ETP conducts operations administer federal
    pipeline safety standards under the Pipeline Safety Act of 1968,
    which requires certain pipeline companies to comply with safety
    standards in constructing and operating the pipelines, and
    subjects pipelines to regular inspections. Some of ETP&#146;s
</DIV>

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    <BR>
    19
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    gathering facilities are exempt from the requirements of this
    Act. In respect to recent pipeline accidents in other parts of
    the country, Congress and the Department of Transportation have
    passed or are considering heightened pipeline safety
    requirements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Failure to comply with applicable regulations under the NGA,
    NGPA, Pipeline Safety Act and certain state laws could result in
    the imposition of administrative, civil and criminal remedies.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    FERC and CFTC are pursuing legal actions against ETP relating to
    certain natural gas trading and transportation activities, and
    related third party claims have been filed against us and
    ETP.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On July&#160;26, 2007, the Federal Energy Regulatory Commission
    (the &#147;FERC&#148;) issued to ETP an Order to Show Cause and
    Notice of Proposed Penalties (the &#147;Order and Notice&#148;)
    that contains allegations that ETP violated FERC rules and
    regulations. The FERC has alleged that ETP engaged in
    manipulative or improper trading activities in the Houston Ship
    Channel, primarily on two dates during the fall of 2005
    following the occurrence of Hurricanes Katrina and Rita, as well
    as on eight dates from December 2003 through August 2005, in
    order to benefit financially from ETP&#146;s commodities
    derivatives positions and from certain of its index-priced
    physical gas purchases in the Houston Ship Channel. The FERC has
    alleged that during these periods ETP violated the FERC&#146;s
    then-effective Market Behavior Rule&#160;2, an anti-market
    manipulation rule promulgated by FERC under authority of the
    Natural Gas Act (&#147;NGA&#148;). ETP allegedly violated this
    rule by artificially suppressing prices that were included in
    the Platts <I>Inside FERC</I> Houston Ship Channel index,
    published by the McGraw&#160;- Hill Companies, on which the
    pricing of many physical natural gas contracts and financial
    derivatives are based. Additionally, the FERC has alleged that
    ETP manipulated daily prices at the Waha Hub in west Texas on
    certain dates in December 2005. The FERC&#146;s action against
    ETP also includes allegations related to ETP&#146;s Oasis
    Pipeline, an intrastate pipeline that transports natural gas
    between the Waha Hub and the Katy Hub near Houston, Texas. The
    Oasis Pipeline also transports interstate natural gas pursuant
    to Natural Gas Policy Act (&#147;NGPA&#148;) Section&#160;311
    authority, and subject to FERC-approved rates, terms and
    conditions of service. The allegations related to the Oasis
    Pipeline include claims that the Oasis Pipeline violated NGPA
    regulations from January&#160;26, 2004 through June&#160;30,
    2006 by granting undue preference to its affiliates for
    interstate NGPA Section&#160;311 pipeline service to the
    detriment of similarly situated non-affiliated shippers and by
    charging in excess of the FERC-approved maximum lawful rate for
    interstate NGPA Section&#160;311 transportation. The FERC also
    seeks to revoke, for a period of 12&#160;months, ETP&#146;s
    blanket marketing authority for sales of natural gas in
    interstate commerce at negotiated rates, which activity is
    expected to account for approximately 1.0% of ETP&#146;s EBITDA
    for its 2007 fiscal year. If the FERC is successful in revoking
    ETP&#146;s blanket marketing authority, ETP&#146;s sales of
    natural gas at market-based rates would be limited to sales of
    natural gas to retail customers, (such as utilities and other
    end-user) and sales from its own production, and any other sales
    of natural gas by ETP would be required to be made at prices
    that would be subject to FERC approval. Also on July&#160;26,
    2007, the United States Commodity Futures Trading Commission
    (the &#147;CFTC&#148;) filed suit in United States District
    Court for the Northern District of Texas alleging that ETP
    violated provisions of the Commodity Exchange Act by attempting
    to manipulate natural gas prices in the Houston Ship Channel. It
    is alleged that such manipulation was attempted during the
    period from late September through early December 2005 to allow
    ETP to benefit financially from ETP&#146;s commodities
    derivatives positions.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In its Order and Notice, the FERC is seeking $70.1&#160;million
    in disgorgement of profits, plus interest, and
    $97.5&#160;million in civil penalties relating to these matters.
    The FERC ordered ETP to show cause why the allegations against
    ETP made in the Order and Notice are not true. ETP filed its
    response to the Order and Notice with the FERC on October 9,
    2007, which response refuted the FERC&#146;s claims and
    requested a dismissal of the FERC proceeding. The FERC has taken
    the position that, once it receives ETP&#146;s response, it has
    several options as to how to proceed, including issuing an order
    on the merits, requesting briefs, or setting specified issues
    for a trial-type hearing before an administrative law judge. In
    its lawsuit, the CFTC is seeking civil penalties of $130,000 per
    violation, or three times the profit gained from each violation,
    and other ancillary relief. The CFTC has not specified the
    number of alleged violations or the amount of alleged profit
    related to the matters specified in its complaint. On October
    15, 2007, ETP filed a motion to dismiss in the
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

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    <BR>
    20
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<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
     United States District Court for the Northern District of Texas
    on the basis that the CFTC has not stated a valid cause of
    action under the Commodity Exchange Act.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is ETP&#146;s position that its trading and transportation
    activities during the periods at issue complied in all material
    respects with applicable laws and regulations, and ETP intends
    to contest these cases vigorously. However, the laws and
    regulations related to alleged market manipulation are vague,
    subject to broad interpretation, and offer little guiding
    precedent, while at the same time the FERC and CFTC hold
    substantial enforcement authority. At this time, neither we nor
    ETP is able to predict the final outcome of these matters.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the FERC and CFTC legal actions, it is also
    possible that third parties will assert claims against ETP and
    ETE for damages related to these matters, which parties could
    include natural gas producers, royalty owners, taxing
    authorities, and parties to physical natural gas contracts and
    financial derivatives based on the Platts <I>Inside FERC
    </I>Houston Ship Channel index during the periods in question.
    In this regard, two natural gas producers have initiated legal
    proceedings against ETP and ETE for claims related to the FERC
    and CFTC claims. One of the producers has brought suit in Texas
    state court against ETP and ETE based on contractual and tort
    claims relating to alleged manipulation of natural gas prices at
    the Waha Hub in West Texas and the Houston Ship Channel and is
    seeking unspecified direct, indirect, consequential and punitive
    damages. The second producer has brought suit in Texas state
    court against ETP and ETE based on contract and tort claims
    relating to a natural gas purchase contract to which ETP and
    this producer are parties. This producer seeks unspecified
    damages and requests pre-arbitration discovery of information
    related to ETP&#146;s activities prior to further pursuing a
    claim for manipulation of natural gas prices in the Houston Ship
    Channel. The producer also seeks to intervene in the FERC
    proceeding, alleging that it is entitled to a FERC-ordered
    refund of $5.9&#160;million, plus interest and costs. In
    addition, a plaintiff has filed a putative class action against
    ETP in the United States District Court for the Southern
    District of Texas. This suit alleges that ETP unlawfully
    manipulated the price of natural gas futures and options
    contracts on the New York Mercantile Exchange, or NYMEX, in
    violation of the Commodity Exchange Act, that ETP has the market
    power to manipulate index prices, and that ETP used this market
    power to artificially depress the index prices at major natural
    gas trading hubs, including the Houston Ship Channel, Waha, and
    Permian hubs, in order to benefit ETP&#146;s natural gas
    physical and financial trading positions. The suit alleges that
    this unlawful depression of index prices by ETP manipulated the
    NYMEX prices for natural gas futures and options contracts to
    artificial levels between December&#160;29, 2003 and
    December&#160;31, 2005, causing unspecified damages to plaintiff
    and all others who purchased
    <FONT style="white-space: nowrap">and/or</FONT> sold
    natural gas futures and options contracts on NYMEX during that
    period.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are expensing the legal fees, consultants&#146; and related
    expenses relating to these matters in the periods in which such
    expenses are incurred. In addition, our existing accruals for
    litigation and contingencies include an accrual related to these
    matters. At this time, we are unable to predict the outcome of
    these matters; however, it is possible that the amount we become
    obligated to pay as a result of the final resolution of these
    matters, whether on a negotiated settlement basis or otherwise,
    will exceed the amount of our existing accrual related to these
    matters. In accordance with applicable accounting standards, we
    will review the amount of our accrual related to these matters
    as developments related to these matters occur and we will
    adjust our accrual if we determine that it is probable that the
    amount we may ultimately become obligated to pay as a result of
    the final resolution of these matters is greater than the amount
    of our existing accrual for these matters. As our accrual
    amounts are non-cash, any cash payment of an amount in
    resolution of these matters would likely be made from cash from
    operations or borrowings, which payments would reduce our cash
    available for distributions either directly or as a result of
    increased principal and interest payments necessary to service
    any borrowings incurred to finance such payments. If these
    payments are substantial, we may experience a material adverse
    impact on our results of operations, cash available for
    distribution and our liquidity.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Transwestern
    is subject to laws, regulations and policies governing the rates
    it is allowed to charge for its services.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Laws, regulations and policies governing interstate natural gas
    pipeline rates could affect Transwestern&#146;s ability to
    establish rates, to charge rates that would cover future
    increases in its costs, or to continue to collect rates that
    cover current costs. Natural gas companies must charge rates
    that are deemed to be just and reasonable by FERC. The rates,
    terms and conditions of service provided by natural gas
    companies are
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

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    <BR>
    21
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<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
     required to be on file with FERC in FERC-approved tariffs.
    Pursuant to the Natural Gas Act, existing rates may be
    challenged by complaint and rate increases proposed by the
    natural gas company may be challenged by protest. Further, other
    than for rates set under market-based rate authority, rates must
    be cost-based and the FERC may order refunds of amounts
    collected under rates that were in excess of a just and
    reasonable level. Transwestern filed a general rate case in
    September 2006. The rates in this proceeding were settled and
    are final and no longer subject to refund. Transwestern is not
    required to file new cost-based rates until October 2011. In
    addition, shippers (other than shippers who have agreed not to
    challenge our tariff rates through 2010 pursuant to our recent
    settlement agreement with these shippers) may challenge the
    lawfulness of tariff rates that have become final and effective.
    The FERC may also investigate such rates absent shipper
    complaint. Any successful complaint or protest against
    Transwestern&#146;s rates could reduce our revenues associated
    with providing transmission services on a prospective basis. We
    cannot assure you that we will be able to recover all of
    Transwestern&#146;s costs through existing or future rates.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    ability of interstate pipelines held in tax-pass-through
    entities, like ETP, to include an allowance for income taxes in
    their regulated rates has been subject to extensive litigation
    before FERC and the courts, and the FERC&#146;s current policy
    is subject to future refinement or change.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The ability of interstate pipelines held in tax-pass-through
    entities, like us, to include an allowance for income taxes as a
    cost-of-service element in their regulated rates has been
    subject to extensive litigation before FERC and the courts for a
    number of years. In July 2004, the D.C. Circuit issued its
    opinion in <I>BP West Coast Products, LLC&#160;v. FERC</I>,
    which upheld, among other things, the FERC&#146;s determination
    that certain rates of an interstate petroleum products pipeline,
    Santa&#160;Fe Pacific Pipeline, or SFPP, were grandfathered
    rates under the Energy Policy Act of 1992 and that SFPP&#146;s
    shippers had not demonstrated substantially changed
    circumstances that would justify modification to those rates.
    The Court also vacated the portion of the FERC&#146;s decision
    applying the <I>Lakehead </I>policy. In the <I>Lakehead
    </I>decision, the FERC allowed an oil pipeline publicly traded
    partnership to include in its cost-of-service an income tax
    allowance to the extent that its unitholders were corporations
    subject to income tax. In May and June 2005, the FERC issued a
    statement of general policy, as well as an order on remand of
    <I>BP West Coast</I>, respectively, in which the FERC stated it
    will permit pipelines to include in cost-of-service a tax
    allowance to reflect actual or potential income tax liability on
    their public utility income attributable to all partnership or
    limited liability company interests, if the ultimate owner of
    the interest has an actual or potential income tax liability on
    such income. Whether a pipeline&#146;s owners have such actual
    or potential income tax liability will be reviewed by the FERC
    on a
    <FONT style="white-space: nowrap">case-by-case</FONT>
    basis. Although the new policy is generally favorable for
    pipelines that are organized as, or owned by, tax-pass-through
    entities, it still entails rate risk due to the
    <FONT style="white-space: nowrap">case-by-case</FONT>
    review requirement. In December 2005, the FERC issued its first
    case-specific oil pipeline review of the income tax allowance
    issues in the SFPP proceeding, reaffirming its new income tax
    allowance policy and directing SFPP to provide certain evidence
    necessary for the pipeline to determine its income allowance.
    Further, in the December 2005 order, the FERC concluded that for
    tax allowance purposes, the FERC would apply a rebuttable
    presumption that corporate partners of pass-through entities pay
    the maximum marginal tax rate of 35% and that non-corporate
    partners of pass-through entities pay a marginal rate of 28%.
    The FERC indicated that it would address the income tax
    allowance issues further in the context of SFPP&#146;s
    compliance filing submitted in March 2006. In December 2006, the
    FERC ruled on some of the issues raised as to the March 2006
    SFPP compliance filing, upholding most of its determinations in
    the December 2005 order. FERC did revise its rebuttable
    presumption as to corporate partners&#146; marginal tax rate
    from 35% to 34%. The FERC&#146;s <I>BP West Coast </I>remand
    decision and the new income tax allowance policy were appealed
    to the D.C. Circuit. In May 2007, the D.C. Circuit affirmed
    FERC&#146;s favorable income tax allowance policy. As a result,
    we remain eligible to include an allowance in the tariff rates
    we charge for natural gas transportation on our Transwestern
    interstate pipeline system, subject to our ability to
    demonstrate compliance with FERC&#146;s policy. The specific
    terms and application of that policy remain subject to future
    refinement or change by FERC and the courts. As FERC has
    recently approved our tariff rates specified in a settlement
    agreement with shippers, the allowance for income taxes as a
    cost-of-service element in our tariff rates is not subject to
    challenge prior to the expiration of this settlement agreement
    in 2011.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    22
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Transwestern
    is subject to laws, regulations and policies governing terms and
    conditions of service, which control many aspects of its
    business.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to rate oversight, FERC&#146;s regulatory authority
    extends to many other aspects of Transwestern&#146;s business
    and operations, including:
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    operating terms and conditions of service;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the types of services Transwestern may offer to its customers;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    construction of new facilities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    acquisition, extension or abandonment of services or facilities;
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reporting and information posting requirements;
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    accounts and records;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    relationships with affiliated companies involved in all aspects
    of the natural gas and energy businesses.
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Compliance with these requirements can be costly and burdensome.
    Future changes to laws, regulations and policies in these areas
    may impair Transwestern&#146;s ability to compete for business
    or increase the cost and burden of operation.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Failure to comply with all applicable FERC-administered
    statutes, rules, regulations and orders, could bring substantial
    penalties and fines. Under the Energy Policy Act of 2005, FERC
    has civil penalty authority under the Natural Gas Act to impose
    penalties for violations after August&#160;8, 2005 up to
    $1.0&#160;million per day for each violation.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Finally, we cannot give any assurance regarding the likely
    future regulations under which we will operate Transwestern or
    the effect such regulation could have on our business, financial
    condition, and results of operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP&#146;s
    business involves hazardous substances and may be adversely
    affected by environmental regulation.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s natural gas midstream, transportation and storage, as
    well as its propane businesses are subject to stringent federal,
    state, and local environmental laws and regulations governing
    the discharge of materials into the environment or otherwise
    relating to environmental protection. These laws and regulations
    may require the acquisition of permits for its operations,
    result in capital expenditures to manage, limit, or prevent
    emissions, discharges, or releases of various materials from
    ETP&#146;s pipelines, plants, and facilities, and impose
    substantial liabilities for pollution resulting from its
    operations. Several governmental authorities, such as the
    U.S.&#160;Environmental Protection Agency or EPA, have the power
    to enforce compliance with these laws and regulations and the
    permits issued under them and frequently mandate difficult and
    costly remediation measures and other actions. Failure to comply
    with these laws, regulations, and permits may result in the
    assessment of administrative, civil, and criminal penalties, the
    imposition of remedial obligations, and the issuance of
    injunctive relief.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP may incur substantial environmental costs and liabilities
    because the underlying risks are inherent to its operations.
    Joint and several, strict liability may be incurred under
    environmental laws and regulations in connection with discharges
    or releases of petroleum hydrocarbons or wastes on, under, or
    from its properties and facilities, many of which have been used
    for industrial activities for a number of years. Private
    parties, including the owners of properties through which
    ETP&#146;s gathering systems pass or facilities where its
    petroleum hydrocarbons or wastes are taken for reclamation or
    disposal, may also have the right to pursue legal actions to
    enforce compliance as well as to seek damages for non-compliance
    with environmental laws and regulations or for personal injury
    or property damage. The total accrued future estimated cost of
    remediation activities relating to ETP&#146;s Transwestern
    Pipeline operations is approximately $12.3&#160;million, which
    activities are expected to continue for several years.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    23
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Changes in environmental laws and regulations occur frequently,
    and any such changes that result in more stringent and costly
    waste handling, storage, transport disposal or remediation
    requirements could have a material adverse effect on ETP&#146;s
    operations or financial position. For instance, the Texas
    Commission on Environmental Quality, or TCEQ, recently adopted a
    rule further restricting the level of nitrogen oxides, or NOx,
    that may be emitted from stationary gas-fired reciprocating
    internal combustion engines located in counties comprising the
    Dallas-Fort&#160;Worth eight hour ozone non-attainment area. As
    a result of the adoption of this rule, by March&#160;1, 2009,
    ETP must either modify or replace seven owned and 21 leased
    compressor units currently located in the Dallas-Fort&#160;Worth
    non-attainment area that do not satisfy the TCEQ&#146;s new,
    more stringent NOx emission limitations. ETP is evaluating its
    options to comply with this rule and thus the costs to comply
    currently are not reasonably estimable but such costs ultimately
    could be material to the operations of ETP. Also, the
    U.S.&#160;Congress is actively considering legislation and more
    than a dozen states have already taken legal measures to reduce
    emissions of certain gases, commonly referred to as greenhouse
    gases and including carbon dioxide and methane, that may be
    contributing to warming of the Earth&#146;s atmosphere.
    Moreover, the U.S.&#160;Supreme Court recently decided, in
    <I>Massachusetts, et al.&#160;v. EPA</I>, that greenhouse gases
    fall within the federal Clean Air Act&#146;s definition of
    &#147;air pollutant,&#148; which could result in the regulation
    of greenhouse gas emissions from stationary sources under
    certain Clean Air Act programs. New legislation or regulatory
    programs that restrict emissions of greenhouse gases in areas in
    which we conduct business could have an adverse affect on our
    operations and demand for our services.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Any
    reduction in the capacity of, or the allocations to, ETP&#146;s
    shippers in interconnecting, third-party pipelines could cause a
    reduction of volumes transported in ETP&#146;s pipelines, which
    would adversely affect ETP&#146;s revenues and cash
    flow.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Users of ETP&#146;s pipelines are dependent upon connections to
    and from third-party pipelines to receive and deliver natural
    gas and NGLs. Any reduction in the capacities of these
    interconnecting pipelines due to testing, line repair, reduced
    operating pressures, or other causes could result in reduced
    volumes being transported in ETP&#146;s pipelines. Similarly, if
    additional shippers begin transporting volumes of natural gas
    and NGLs over interconnecting pipelines, the allocations to
    existing shippers in these pipelines would be reduced, which
    could also reduce volumes transported in ETP&#146;s pipelines.
    Any reduction in volumes transported in ETP&#146;s pipelines
    would adversely affect its revenues and cash flow.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP
    encounters competition from other midstream, transportation and
    storage companies and propane companies.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP experiences competition in all of its markets. ETP&#146;s
    principal areas of competition include obtaining natural gas
    supplies for the Southeast Texas System, North Texas System and
    Houston Pipe Line System and natural gas transportation
    customers for its transportation pipeline systems. ETP&#146;s
    competitors include major integrated oil companies, interstate
    and intrastate pipelines and companies that gather, compress,
    treat, process, transport, store and market natural gas. The
    Southeast Texas System competes with natural gas gathering and
    processing systems owned by DCP Midstream, LLC. The East Texas
    Pipeline competes with other natural gas transportation
    pipelines that serve the Bossier Sands area in east Texas and
    the Barnett Shale area of the Fort&#160;Worth Basin in north
    Texas. The ET Fuel System and the Oasis Pipeline compete with a
    number of other natural gas pipelines, including interstate and
    intrastate pipelines that link the Waha Hub. The Fort&#160;Worth
    Basin Pipeline competes with other natural gas transportation
    pipelines serving the Dallas/Ft.&#160;Worth area and other
    pipelines that serve the east central Texas and south Texas
    markets. Pipelines that ETP competes with in these areas include
    those owned by Atmos Energy Corporation, Enterprise Products
    Partners, L.P., and Enbridge, Inc. Some of ETP&#146;s
    competitors may have greater financial resources and access to
    larger natural gas supplies than it does.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The acquisitions of the Houston Pipe Line System in 2005 and the
    Transwestern Pipeline System in 2006 increased the number of
    interstate pipelines and natural gas markets to which ETP has
    access and expanded its principal areas of competition to areas
    such as southeast Texas and the Texas Gulf Coast. As a result of
    ETP&#146;s expanded market presence and diversification, ETP
    faces additional competitors, such as major integrated oil
    companies, interstate and intrastate pipelines and companies
    that gather, compress, treat, process, transport,
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    24
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    store and market natural gas, that may have greater financial
    resources and access to larger natural gas supplies than ETP
    does.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The interstate pipeline business of Transwestern competes with
    those of other interstate and intrastate pipeline companies in
    the transportation and storage of natural gas. The principal
    elements of competition among pipelines are rates, terms of
    service and the flexibility and reliability of service. Natural
    gas competes with other forms of energy available to our
    customers and end-users, including electricity, coal and fuel
    oils. The primary competitive factor is price. Changes in the
    availability or price of natural gas and other forms of energy,
    the level of business activity, conservation, legislation and
    governmental regulations, the capability to convert to alternate
    fuels and other factors, including weather and natural gas
    storage levels, affect the levels of natural gas transportation
    volumes in the areas served by our pipelines.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s propane business competes with a number of large
    national and regional propane companies and several thousand
    small independent propane companies. Because of the relatively
    low barriers to entry into the retail propane market, there is
    potential for small independent propane retailers, as well as
    other companies that may not currently be engaged in retail
    propane distribution, to compete with ETP&#146;s retail outlets.
    As a result, ETP is always subject to the risk of additional
    competition in the future. Generally, warmer-than-normal weather
    further intensifies competition. Most of ETP&#146;s retail
    propane branch locations compete with several other marketers or
    distributors in their service areas. The principal factors
    influencing competition with other retail propane marketers are:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    price,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reliability and quality of service,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    responsiveness to customer needs,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    safety concerns,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    long-standing customer relationships,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the inconvenience of switching tanks and suppliers,&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the lack of growth in the industry.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    inability to continue to access tribal lands could adversely
    affect Transwestern&#146;s ability to operate its pipeline
    system and the inability to recover the cost of right-of-way
    grants on tribal lands could adversely affect its financial
    results.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Transwestern&#146;s ability to operate its pipeline system on
    certain lands held in trust by the United States for the benefit
    of a Native American Tribe, which we refer to as tribal lands,
    will depend on its success in maintaining existing rights-of-way
    and obtaining new rights-of-way on those tribal lands. Securing
    additional rights-of-way is also critical to Transwestern&#146;s
    ability to pursue expansion projects. We cannot provide any
    assurance that Transwestern will be able to acquire new
    rights-of-way on Tribal lands or maintain access to existing
    rights-of-way upon the expiration of the current grants. Our
    financial position could be adversely affected if the costs of
    new or extended right-of-way grants cannot be recovered in rates.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP is
    exposed to the credit risk of its customers, and an increase in
    the nonpayment and nonperformance by its customers could reduce
    its ability to make distributions to its unitholders, including
    to us.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The risks of nonpayment and nonperformance by ETP&#146;s
    customers are a major concern in its business. Participants in
    the energy industry have been subjected to heightened scrutiny
    from the financial markets in light of past collapses and
    failures of other energy companies. ETP is subject to risks of
    loss resulting from nonpayment or nonperformance by its
    customers. Any substantial increase in the nonpayment and
    nonperformance by ETP&#146;s customers could reduce its ability
    to make distributions to its unitholders, including to us.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    25
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP
    may be unable to bypass the La&#160;Grange and North Texas
    processing plants, which could expose it to the risk of
    unfavorable processing margins.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because of ETP&#146;s ownership of the Oasis and ET Fuel
    Pipelines, it can generally elect to bypass the La&#160;Grange
    or North Texas processing plants when processing margins are
    unfavorable and instead deliver pipeline-quality gas by blending
    rich gas from the Southeast Texas System and North Texas System
    with lean gas transported on the Oasis and ET Fuel Pipelines. In
    some circumstances, such as when ETP does not have a sufficient
    amount of lean gas on the Oasis and ET Fuel Pipelines to blend
    with the volume of rich gas that it receives at the
    La&#160;Grange and North Texas processing plants, ETP may have
    to process the rich gas. If ETP has to process when processing
    margins are unfavorable, its results of operations will be
    adversely affected.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP
    may be unable to retain existing customers or secure new
    customers, which would reduce its revenues and limit its future
    profitability.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The renewal or replacement of existing contracts with ETP&#146;s
    customers at rates sufficient to maintain current revenues and
    cash flows depends on a number of factors beyond its control,
    including competition from other pipelines, and the price of,
    and demand for, natural gas in the markets ETP serves.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For ETP&#146;s nine months ended May&#160;31, 2007,
    approximately 36% of its sales of natural gas were to industrial
    end-users and utilities. As a consequence of the increase in
    competition in the industry and volatility of natural gas
    prices, end-users and utilities are increasingly reluctant to
    enter into long-term purchase contracts. Many end-users purchase
    natural gas from more than one natural gas company and have the
    ability to change providers at any time. Some of these end-users
    also have the ability to switch between gas and alternate fuels
    in response to relative price fluctuations in the market.
    Because there are many companies of greatly varying size and
    financial capacity that compete with ETP in the marketing of
    natural gas, ETP often competes in the end-user markets and
    utilities markets primarily on the basis of price. The inability
    of ETP&#146;s management to renew or replace its current
    contracts as they expire and to respond appropriately to
    changing market conditions could have a negative effect on
    ETP&#146;s profitability.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP&#146;s
    storage business depends on neighboring pipelines to transport
    natural gas.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To obtain natural gas, ETP&#146;s storage business depends on
    the pipelines to which it has access. Many of these pipelines
    are owned by parties not affiliated with ETP. Any interruption
    of service on those pipelines or adverse change in their terms
    and conditions of service could have a material adverse effect
    on ETP&#146;s ability, and the ability of its customers, to
    transport natural gas to and from its facilities and a
    corresponding material adverse effect on ETP&#146;s storage
    revenues. In addition, the rates charged by those interconnected
    pipelines for transportation to and from ETP&#146;s facilities
    affect the utilization and value of its storage services.
    Significant changes in the rates charged by those pipelines or
    the rates charged by other pipelines with which the
    interconnected pipelines compete could also have a material
    adverse effect on ETP&#146;s storage revenues.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP&#146;s
    pipeline integrity program may cause it to incur significant
    costs and liabilities.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s operations are subject to regulation by the U.S.
    Department of Transportation, or DOT, under the Hazardous
    Liquids Pipeline Safety Act, or HLPSA, pursuant to which the DOT
    has established regulations relating to the design,
    installation, testing, construction, operation, replacement and
    management of pipeline facilities. Moreover, the DOT, through
    the Office of Pipeline Safety, has promulgated a rule requiring
    pipeline operators to develop integrity management programs to
    comprehensively evaluate their pipelines, and take measures to
    protect pipeline segments located in what the rule refers to as
    &#147;high consequence areas.&#148; Based on the results of
    ETP&#146;s current pipeline integrity testing programs, ETP
    estimates that compliance with these federal regulations and
    analogous state pipeline integrity requirements for its existing
    transportation assets other than Transwestern Pipeline will
    result in capital costs of $15.7&#160;million during the period
    between the remainder of calendar year 2007 through 2008, as
    well as operating and maintenance costs of $17.9&#160;million
    during that period. During this same time period, ETP estimates
    that it will incur pipeline integrity operating and maintenance
    costs of $8.5&#160;million with respect to its Transwestern
    Pipeline. Through May&#160;31, 2007, a total of
    $11.8&#160;million of capital costs and $12.0&#160;million of
    operating and maintenance costs have been incurred
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    26
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    for pipeline integrity testing. Integrity testing and assessment
    of all of these assets will continue, and the potential exists
    that results of such testing and assessment could cause ETP to
    incur even greater capital and operating expenditures for
    repairs or upgrades deemed necessary to ensure the continued
    safe and reliable operation of its pipelines.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Since
    weather conditions may adversely affect demand for propane,
    ETP&#146;s financial conditions may be vulnerable to warm
    winters.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Weather conditions have a significant impact on the demand for
    propane for heating purposes because the majority of ETP&#146;s
    customers rely heavily on propane as a heating fuel. Typically,
    ETP sells approximately two-thirds of its retail propane volume
    during the peak-heating season of October through March.
    ETP&#146;s results of operations can be adversely affected by
    warmer winter weather which results in lower sales volumes. In
    addition, to the extent that warm weather or other factors
    adversely affect ETP&#146;s operating and financial results, its
    access to capital and its acquisition activities may be limited.
    Variations in weather in one or more of the regions where ETP
    operates can significantly affect the total volume of propane
    that ETP sells and the profits realized on these sales.
    Agricultural demand for propane may also be affected by weather,
    including periods of unseasonably cold or hot periods or dry
    weather conditions which may impact agricultural operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">A
    natural disaster, catastrophe or other event could result in
    severe personal injury, property damage and environmental
    damage, which could curtail ETP&#146;s operations and otherwise
    materially adversely affect its cash flow and, accordingly,
    affect the market price of ETP&#146;s common
    units.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Some of ETP&#146;s operations involve risks of personal injury,
    property damage and environmental damage, which could curtail
    its operations and otherwise materially adversely affect its
    cash flow. For example, natural gas facilities operate at high
    pressures, sometimes in excess of 1,100 pounds per square inch.
    Virtually all of ETP&#146;s operations are exposed to potential
    natural disasters, including hurricanes, tornadoes, storms,
    floods
    <FONT style="white-space: nowrap">and/or</FONT>
    earthquakes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If one or more facilities that are owned by ETP or that deliver
    natural gas or other products to ETP are damaged by severe
    weather or any other disaster, accident, catastrophe or event,
    ETP&#146;s operations could be significantly interrupted.
    Similar interruptions could result from damage to production or
    other facilities that supply ETP&#146;s facilities or other
    stoppages arising from factors beyond its control. These
    interruptions might involve significant damage to people,
    property or the environment, and repairs might take from a week
    or less for a minor incident to six months or more for a major
    interruption. Any event that interrupts the revenues generated
    by ETP&#146;s operations, or which causes it to make significant
    expenditures not covered by insurance, could reduce ETP&#146;s
    cash available for paying distributions to its unitholders,
    including ETE and, accordingly, adversely affect the market
    price of ETP&#146;s common units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP believes that it maintains adequate insurance coverage,
    although insurance will not cover many types of interruptions
    that might occur. As a result of market conditions, premiums and
    deductibles for certain insurance policies can increase
    substantially, and in some instances, certain insurance may
    become unavailable or available only for reduced amounts of
    coverage. As a result, ETP may not be able to renew existing
    insurance policies or procure other desirable insurance on
    commercially reasonable terms, if at all. If ETP were to incur a
    significant liability for which it was not fully insured, it
    could have a material adverse effect on ETP&#146;s financial
    position and results of operations. In addition, the proceeds of
    any such insurance may not be paid in a timely manner and may be
    insufficient if such an event were to occur.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Terrorist
    attacks aimed at ETP&#146;s facilities could adversely affect
    its business, results of operations, cash flows and financial
    condition.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Since the September&#160;11, 2001 terrorist attacks on the
    United States, the United States government has issued warnings
    that energy assets, including the nation&#146;s pipeline
    infrastructure, may be the future target of terrorist
    organizations. These developments have subjected our operations
    to increased risks. Any terrorist
</DIV>

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    <BR>
    27
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    attack on ETP&#146;s facilities or pipelines or those of its
    customers could have a material adverse effect on ETP&#146;s
    business.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Sudden
    and sharp propane price increases that cannot be passed on to
    customers may adversely affect ETP&#146;s profit
    margins.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The propane industry is a &#147;margin-based&#148; business in
    which gross profits depend on the excess of sales prices over
    supply costs. As a result, ETP&#146;s profitability is sensitive
    to changes in energy prices, and in particular, changes in
    wholesale prices of propane. When there are sudden and sharp
    increases in the wholesale cost of propane, ETP may be unable to
    pass on these increases to its customers through retail or
    wholesale prices. Propane is a commodity and the price ETP pays
    for it can fluctuate significantly in response to changes in
    supply or other market conditions over which ETP has no control.
    In addition, the timing of cost pass-throughs can significantly
    affect margins. Sudden and extended wholesale price increases
    could reduce ETP&#146;s gross profits and could, if continued
    over an extended period of time, reduce demand by encouraging
    ETP&#146;s retail customers to conserve their propane usage or
    convert to alternative energy sources.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP&#146;s
    results of operations and its ability to make distributions or
    pay interest or principal on debt securities could be negatively
    impacted by price and inventory risk related to its propane
    business and management of these risks.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP generally attempts to minimize its cost and inventory risk
    related to its propane business by purchasing propane on a
    short-term basis under supply contracts that typically have a
    one-year term and at a cost that fluctuates based on the
    prevailing market prices at major delivery points. In order to
    help ensure adequate supply sources are available during periods
    of high demand, ETP may purchase large volumes of propane during
    periods of low demand or low price, which generally occur during
    the summer months, for storage in its facilities, at major third
    party storage facilities owned by third parties or for future
    delivery. This strategy may not be effective in limiting
    ETP&#146;s cost and inventory risks if, for example, market,
    weather or other conditions prevent or allocate the delivery of
    physical product during periods of peak demand. If the market
    price falls below the cost at which ETP made such purchases, it
    could adversely affect its profits.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Some of ETP&#146;s propane sales are pursuant to commitments at
    fixed prices. To mitigate the price risk related to ETP&#146;s
    anticipated sales volumes under the commitments, ETP may
    purchase and store physical product
    <FONT style="white-space: nowrap">and/or</FONT> enter
    into fixed price over-the-counter energy commodity forward
    contracts and options. Generally, over-the-counter energy
    commodity forward contracts have terms of less than one year.
    ETP enters into such contracts and exercises such options at
    volume levels that it believes are necessary to manage these
    commitments. The risk management of ETP&#146;s inventory and
    contracts for the future purchase of product could impair its
    profitability if customers do not fulfill their obligations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP also engages in other trading activities, and may enter into
    other types of over-the-counter energy commodity forward
    contracts and options. These trading activities are based on ETP
    management&#146;s estimates of future events and prices and are
    intended to generate a profit. However, if those estimates are
    incorrect or other market events outside of ETP&#146;s control
    occur, such activities could generate a loss in future periods
    and potentially impair its profitability.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP is
    dependent on its principal propane suppliers, which increases
    the risk of an interruption in supply.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During fiscal 2006, ETP purchased approximately 27% of its
    propane from Enterprise Products Operating L.P., approximately
    18% from Targa Liquids, and approximately 22% of its propane
    from M-P Energy Partnership, the Canadian partnership in which
    ETP owns a 60% interest. Titan purchases substantially all of
    its propane from Enterprise Products Operating L.P. pursuant to
    an agreement that expires in 2010. If supplies from these
    sources were interrupted, the cost of procuring replacement
    supplies and transporting those supplies from alternative
    locations might be materially higher and, at least on a
    short-term basis, margins could be adversely affected. Supply
    from Canada is subject to the additional risk of disruption
    associated with foreign trade such as trade restrictions,
    shipping delays and political, regulatory and economic
    instability.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    28
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Historically, a substantial portion of the propane that ETP
    purchases originated from one of the industry&#146;s major
    markets located in Mt. Belvieu, Texas and has been shipped to
    ETP through major common carrier pipelines. Any significant
    interruption in the service at Mt. Belvieu or other major market
    points, or on the common carrier pipelines ETP uses, would
    adversely affect its ability to obtain propane.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Competition
    from alternative energy sources may cause ETP to lose propane
    customers, thereby reducing its revenues.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Competition in ETP&#146;s propane business from alternative
    energy sources has been increasing as a result of reduced
    regulation of many utilities. Propane is generally not
    competitive with natural gas in areas where natural gas
    pipelines already exist because natural gas is a less expensive
    source of energy than propane. The gradual expansion of natural
    gas distribution systems and the availability of natural gas in
    many areas that previously depended upon propane could cause ETP
    to lose customers, thereby reducing its revenues. Fuel oil also
    competes with propane and is generally less expensive than
    propane. In addition, the successful development and increasing
    usage of alternative energy sources could adversely affect
    ETP&#146;s operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Energy
    efficiency and technological advances may affect the demand for
    propane and adversely affect ETP&#146;s operating
    results.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The national trend toward increased conservation and
    technological advances, including installation of improved
    insulation and the development of more efficient furnaces and
    other heating devices, has decreased the demand for propane by
    retail customers. Stricter conservation measures in the future
    or technological advances in heating, conservation, energy
    generation or other devices could adversely affect ETP&#146;s
    operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax Risks
    to Common Unitholders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to reading the following risk factors, you should
    read &#147;Material Tax Consequences&#148; for a more complete
    discussion of the expected material federal income tax
    consequences of owning and disposing of common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    tax treatment depends on our status as a partnership for federal
    income tax purposes, as well as our not being subject to a
    material amount of entity-level taxation by individual states.
    If the IRS were to treat us or ETP as a corporation or if we
    become subject to a material amount of entity-level taxation for
    state tax purposes, it would substantially reduce the amount of
    cash available for distribution to unitholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The anticipated after-tax economic benefit of an investment in
    our common units depends largely on our being treated as a
    partnership for federal income tax purposes. We have not
    requested, and do not plan to request, a ruling from the IRS on
    this or any other matter affecting us. The value of our
    investment in ETP depends largely on ETP being treated as a
    partnership for federal income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we were treated as a corporation for federal income tax
    purposes, we would pay federal income tax on our taxable income
    at the corporate tax rate, which is currently a maximum of 35%,
    and we would likely pay additional state income taxes as well.
    Distributions to unitholders would generally be taxed again as
    corporate distributions, and none of our income, gains, losses
    or deductions would flow through to unitholders. Because a tax
    would then be imposed upon us as a corporation, our cash
    available for distribution to unitholders would be substantially
    reduced. Therefore, treatment of us as a corporation would
    result in a material reduction in the anticipated cash flow and
    after-tax return to the unitholders, likely causing a
    substantial reduction in the value of our common units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If ETP were treated as a corporation for federal income tax
    purposes, it would pay federal income tax on its taxable income
    at the corporate tax rate. Distributions to us would generally
    be taxed again as corporate distributions, and no income, gains,
    losses, deduction or credits would flow through to us. As a
    result, there would be a material reduction in our anticipated
    cash flow, likely causing a substantial reduction in the value
    of our units.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    29
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Current law may change, causing us or ETP to be treated as a
    corporation for federal income tax purposes or otherwise
    subjecting us or ETP to entity-level taxation. For example,
    because of widespread state budget deficits and other reasons,
    several states are evaluating ways to subject partnerships to
    entity-level taxation through the imposition of state income,
    franchise or other forms of taxation. If any state were to
    impose a tax upon us or ETP as an entity, the cash available for
    distribution to our unitholders would be reduced.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    tax treatment of our structure is subject to potential
    legislative, judicial or administrative changes and differing
    interpretations, possibly on a retroactive basis.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The U.S.&#160;federal income tax treatment of common unitholders
    depends in some instances on determinations of fact and
    interpretations of complex provisions of U.S.&#160;federal
    income tax law. You should be aware that the U.S.&#160;federal
    income tax rules are constantly under review by persons involved
    in the legislative process, the IRS, and the U.S.&#160;Treasury
    Department, frequently resulting in revised interpretations of
    established concepts, statutory changes, revisions to Treasury
    Regulations and other modifications and interpretations. The
    present U.S.&#160;federal income tax treatment of an investment
    in our common units may be modified by administrative,
    legislative or judicial interpretation at any time. Any
    modification to the U.S.&#160;federal income tax laws and
    interpretations thereof may or may not be applied retroactively
    and could make it more difficult or impossible to meet the
    exception for us to be treated as a partnership for
    U.S.&#160;federal income tax purposes that is not taxable as a
    corporation (referred to as the &#147;Qualifying Income
    Exception&#148;), affect or cause us to change our business
    activities, affect the tax considerations of an investment in
    us, change the character or treatment of portions of our income
    and adversely affect an investment in our common units. For
    example, in response to certain recent developments, members of
    Congress are considering substantive changes to the definition
    of qualifying income under Internal Revenue Code
    section&#160;7704(d). It is possible that these efforts could
    result in changes to the existing U.S.&#160;federal tax laws
    that affect publicly traded partnerships, including us. We are
    unable to predict whether any of these changes or other
    proposals will ultimately be enacted. Any such changes could
    negatively impact the value of an investment in our common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    prorate our items of income, gain, loss and deduction between
    transferors and transferees of our units each month based upon
    the ownership of our units on the first day of each month,
    instead of on the basis of the date a particular unit is
    transferred. The IRS may challenge this treatment, which could
    change the allocation of items of income, gain, loss and
    deduction among our unitholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We prorate our items of income, gain, loss and deduction between
    transferors and transferees of our units each month based upon
    the ownership of our units on the first day of each month,
    instead of on the basis of the date a particular unit is
    transferred. The use of this proration method may not be
    permitted under existing Treasury regulations, and, accordingly,
    Vinson&#160;&#038; Elkins L.L.P. is unable to opine as to the
    validity of this method. If the IRS were to challenge this
    method or new Treasury regulations were issued, we may be
    required to change the allocation of items of income, gain, loss
    and deduction among our unitholders. Please read &#147;Material
    Tax Consequences&#160;&#151; Disposition of Common
    Units&#160;&#151; Allocations Between Transferors and
    Transferees.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If the
    IRS contests the federal income tax positions we or ETP takes,
    the market for our common units or ETP common units may be
    adversely affected, and the costs of any such contest will
    reduce cash available for distributions to our
    unitholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The IRS may adopt positions that differ from the conclusions of
    our counsel expressed in this prospectus or from the positions
    we or ETP take. It may be necessary to resort to administrative
    or court proceedings to sustain some or all of our
    counsel&#146;s conclusions or the positions we or ETP take. A
    court may not agree with some or all of our counsel&#146;s
    conclusions or the positions we or ETP take. Any contest with
    the IRS may materially and adversely impact the market for our
    common units or ETP&#146;s common units and the prices at which
    they trade. In addition, the costs of any contest with the IRS
    will be borne by us or ETP, and therefore indirectly by us, as a
    unitholder and as the owner of the general partner of ETP,
    reducing the cash available for distribution to our unitholders.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    30
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Unitholders
    may be required to pay taxes on their share of our income even
    if they do not receive any cash distributions from
    us.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because our unitholders will be treated as partners to whom we
    will allocate taxable income which could be different in amount
    than the cash we distribute, unitholders will be required to pay
    any federal income taxes and, in some cases, state and local
    income taxes on your share of our taxable income even if they
    receive no cash distributions from us. Unitholders may not
    receive cash distributions from us equal to their share of our
    taxable income or even equal to the actual tax liability that
    results from the taxation of their share of our taxable income.
    In such case, unitholders would still be required to pay federal
    income taxes and, in some cases, state and local income taxes on
    their share of our taxable income regardless of the amount, if
    any, of any cash distributions they receive from us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Tax
    gain or loss on disposition of our common units could be more or
    less than expected.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If unitholders sell their common units, they will recognize a
    gain or loss equal to the difference between the amount realized
    and the tax basis in those common units. Because distributions
    in excess of the unitholder&#146;s allocable share of our net
    taxable income decrease the unitholder&#146;s tax basis in their
    common units, the amount, if any, of such prior excess
    distributions with respect to the units sold will, in effect,
    become taxable income to the unitholder if they sell such units
    at a price greater than their tax basis in those units, even if
    the price received is less than their original cost.
    Furthermore, a substantial portion of the amount realized,
    whether or not representing gain, may be taxed as ordinary
    income due to potential recapture items, including depreciation
    recapture. In addition, because the amount realized includes a
    unitholder&#146;s share of our nonrecourse liabilities, if a
    unitholder sells units, the unitholder may incur a tax liability
    in excess of the amount of cash received from the sale. Please
    read &#147;Material Tax Consequences&#160;&#151; Disposition of
    Common Units&#160;&#151; Recognition of Gain or Loss&#148; for a
    further discussion of the foregoing.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Tax-exempt
    entities and foreign persons face unique tax issues from owning
    common units that may result in adverse tax consequences to
    them.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Investment in common units by tax-exempt entities, including
    employee benefit plans and individual retirement accounts (known
    as IRAs) and
    <FONT style="white-space: nowrap">non-U.S.&#160;persons</FONT>
    raises issues unique to them. For example, virtually all of our
    income allocated to unitholders who are organizations exempt
    from federal income tax, may be taxable to them as
    &#147;unrelated business taxable income.&#148; Distributions to
    <FONT style="white-space: nowrap">non-U.S.&#160;persons</FONT>
    will be reduced by withholding taxes, at the highest applicable
    effective tax rate, and
    <FONT style="white-space: nowrap">non-U.S.&#160;persons</FONT>
    will be required to file federal income tax returns and
    generally pay tax on their share of our taxable income. If you
    are a tax-exempt entity or a
    <FONT style="white-space: nowrap">non-U.S.&#160;person,</FONT>
    you should consult your tax advisor before investing in our
    common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    treat each purchaser of common units as having the same tax
    benefits without regard to the actual common units purchased.
    The IRS may challenge this treatment, which could result in a
    Unitholder owing more tax and may adversely affect the value of
    the common units.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To maintain the uniformity of the economic and tax
    characteristics of our common units, we have adopted certain
    depreciation and amortization positions that are inconsistent
    with existing Treasury Regulations. These positions may result
    in an understatement of deductions and losses and an
    overstatement of income and gain to our unitholders. For
    example, we do not amortize certain goodwill assets, the value
    of which has been attributed to certain of our outstanding
    units. A subsequent holder of those units is entitled to an
    amortization deduction attributable to that goodwill under
    Internal Revenue Code Section&#160;743(b). But, because we
    cannot identify these units once they are traded by the initial
    holder, we do not give any subsequent holder of a unit any such
    amortization deduction. This approach understates deductions
    available to those Unitholders who own those units and may
    result in those unitholders believing that they have a higher
    tax basis in their units than is actually the case. This, in
    turn, may result in those unitholders reporting less gain or
    more loss on a sale of their units than is actually the case.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The IRS may challenge the manner in which we calculate our
    unitholder&#146;s basis adjustment under Section&#160;743(b). If
    so, because neither we nor a unitholder can identify the units
    to which this issue relates
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    31
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    once the initial holder has traded them, the IRS may assert
    adjustments to all unitholders selling units within the period
    under audit as if all unitholders owned such units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any position we take that is inconsistent with applicable
    Treasury Regulations may have to be disclosed on our federal
    income tax return. This disclosure increases the likelihood that
    the IRS will challenge our positions and propose adjustments to
    some or all of our unitholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A successful IRS challenge to this position or other positions
    we may take could adversely affect the amount of taxable income
    or loss allocated to our unitholders. It also could affect the
    gain from a unitholder&#146;s sale of common units and could
    have a negative impact on the value of the common units or
    result in audit adjustments to our unitholders&#146; tax returns
    without the benefit of additional deductions. Moreover, because
    one of our subsidiaries that is organized as a C corporation for
    federal income tax purposes owns units in us, a successful IRS
    challenge could result in this subsidiary having more tax
    liability than we anticipate and, therefore, reduce the cash
    available for distribution to our partnership and, in turn, to
    you.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ETP
    has adopted certain valuation methodologies that may result in a
    shift of income, gain, loss and deduction between us and the
    public unitholders of ETP. The IRS may challenge this treatment,
    which could adversely affect the value of ETP&#146;s common
    units and our common units.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    When we or ETP issue additional units or engage in certain other
    transactions, ETP determines the fair market value of its assets
    and allocates any unrealized gain or loss attributable to such
    assets to the capital accounts of ETP&#146;s unitholders and us.
    Although ETP may from time to time consult with professional
    appraisers regarding valuation matters, including the valuation
    of its assets, ETP makes many of the fair market value estimates
    of its assets itself using a methodology based on the market
    value of its common units as a means to measure the fair market
    value of its assets. ETP&#146;s methodology may be viewed as
    understating the value of ETP&#146;s assets. In that case, there
    may be a shift of income, gain, loss and deduction between
    certain ETP unitholders and us, which may be unfavorable to such
    ETP unitholders. Moreover, under our current valuation methods,
    subsequent purchasers of our common units may have a greater
    portion of their Internal Revenue Code Section&#160;743(b)
    adjustment allocated to ETP&#146;s intangible assets and a
    lesser portion allocated to ETP&#146;s tangible assets. The IRS
    may challenge ETP&#146;s valuation methods, or our or ETP&#146;s
    allocation of Section&#160;743(b) adjustment attributable to
    ETP&#146;s tangible and intangible assets, and allocations of
    income, gain, loss and deduction between us and certain of
    ETP&#146;s unitholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A successful IRS challenge to these methods or allocations could
    adversely affect the amount of taxable income or loss being
    allocated to our unitholders or the ETP unitholders. It also
    could affect the amount of gain on the sale of common units by
    our unitholders or ETP&#146;s unitholders and could have a
    negative impact on the value of our common units or those of ETP
    or result in audit adjustments to the tax returns of our or
    ETP&#146;s unitholders without the benefit of additional
    deductions.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    sale or exchange of 50% or more of our capital and profits
    interests during any twelve month period will result in the
    termination of our partnership for federal income tax
    purposes.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership will be considered to have terminated for
    federal income tax purposes if transfers of units within a
    twelve month period constitute the sale or exchange of 50% or
    more of our capital and profit interests. In order to determine
    whether a sale or exchange of 50% or more of capital and profits
    interests has occurred, we review information available to us
    regarding transactions involving transfers of our units,
    including reported transfers of units by our affiliates and
    sales of units pursuant to trading activity in the public
    markets; however, the information we are able to obtain is
    generally not sufficient to make a definitive determination, on
    a current basis, of whether there have been sales and exchanges
    of 50% or more of our capital and profits interests within the
    prior twelve month period, and we may not have all of the
    information necessary to make this determination until several
    months following the time of the transfers that would cause the
    50% threshold to be exceeded.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Based on the information currently available to us, we believe
    and intend to take the position that the sale of our common
    units by Ray C. Davis and Natural Gas Partners VI, L.P. to
    Enterprise GP Holdings, L.P. on May&#160;7, 2007, together with
    all other common units sold within the prior twelve months,
    represented a sale or
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    32
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    exchange of 50% or more of the total interest in our capital and
    profits interests and resulted in our termination and immediate
    reconstitution as a new partnership for federal income tax
    purposes. Moreover, our termination resulted in a deemed
    transfer of all of our interests in ETP, causing a termination
    of ETP&#146;s partnership for federal income tax purposes. These
    terminations do not affect our classification or the
    classification of ETP as a partnership for federal income tax
    purposes or otherwise affect the nature or extent of our
    &#147;qualifying income&#148; or the &#147;qualifying
    income&#148; of ETP for federal income tax purposes. The closing
    of our taxable years will result in us and ETP both filing two
    tax returns (and unitholders receiving two
    <FONT style="white-space: nowrap">Schedule&#160;K-1&#146;s)</FONT>
    for one fiscal year. Moreover, these terminations will require
    both us and ETP to close our taxable years and to make new
    elections as to various tax matters. In addition, ETP will be
    required to reset the depreciation schedule for its depreciable
    assets for federal income tax purposes. The resetting of
    ETP&#146;s depreciation schedule will result in a deferral of
    the depreciation deductions allowable in computing the taxable
    income allocated to the unitholders of ETP (including Heritage
    Holdings as the holder of our Class&#160;E units) and,
    consequently, to our unitholders. However, elections ETP and ETE
    will make with respect to the amortization of certain intangible
    assets should have the effect of reducing the amount of taxable
    income that would otherwise be allocated to ETE unitholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that the net effect of our tax termination and the
    tax termination of ETP will be an allocation for the 2007
    calendar year of (i)&#160;an increased amount of taxable income
    as a percentage of the cash distributed to our unitholders who
    acquired their units prior to our initial public offering in
    February&#160;2006 and (ii)&#160;a decrease in the amount of
    taxable income as a percentage of the cash distributed to our
    unitholders who purchased their units on or after the date of
    our initial public offering in February 2006. We estimate, based
    on our current distribution levels and various assumptions
    regarding the gross income and capital expenditures of ETP, that
    a unitholder who purchased our units on the date of our initial
    public offering or a new purchaser of our units would be
    allocated taxable income of less than 10% of the cash
    distributed to them for the 2008 calendar year. In the case of a
    unitholder reporting on a taxable year other than a fiscal year
    ending December&#160;31, the closing of our taxable year may
    result in more than twelve months of our income or loss being
    includable in their taxable income for the year of termination.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>You will likely be subject to state and local taxes and
    return filing requirements in states where you do not live as a
    result of investing in our common units.</I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to federal income taxes, the unitholders may be
    subject to other taxes, including state and local taxes,
    unincorporated business taxes and estate, inheritance or
    intangible taxes that are imposed by the various jurisdictions
    in which we or ETP do business or own property now or in the
    future, even if they do not live in any of those jurisdictions.
    Unitholders may be required to file state and local income tax
    returns and pay state and local income taxes in some or all of
    the jurisdictions. Further, unitholders may be subject to
    penalties for failure to comply with those requirements. It is
    the responsibility of each unitholder to file all federal, state
    and local tax returns. Our counsel has not rendered an opinion
    on the state or local tax consequences of an investment in us.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    33
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "USE OF PROCEEDS" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='123'></A><B><FONT style="font-family: 'Times New Roman', Times">USE
    OF PROCEEDS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The common units to be offered and sold using this prospectus
    will be offered and sold by the selling unitholders named in
    this prospectus or in any supplement to this prospectus. We will
    not receive any proceeds from the sale of such common units.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    34
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "DESCRIPTION OF OUR COMMON UNITS" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='124'></A><B><FONT style="font-family: 'Times New Roman', Times">DESCRIPTION
    OF OUR COMMON UNITS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Generally, our common units represent limited partner interests
    that entitle the holders to participate in our cash
    distributions and to exercise the rights and privileges
    available to limited partners under our partnership agreement.
    For a description of the relative rights and preferences of
    holders of common units and our general partner in and to cash
    distributions, please read &#147;Our Cash Distribution
    Policy.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our outstanding common units trade on the NYSE under the symbol
    &#147;ETE.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transfer
    Agent and Registrar</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    American Stock Transfer&#160;&#038; Trust&#160;Company serves as
    our registrar and transfer agent for our common units. We pay
    all fees charged by the transfer agent for transfers of units,
    except the following that must be paid by unitholders:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    surety bond premiums to replace lost or stolen certificates,
    taxes and other governmental charges;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    special charges for services requested by a holder of a common
    unit;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    other similar fees or charges.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There is no charge to unitholders for disbursements of our cash
    distributions. We will indemnify the transfer agent, its agents
    and each of their stockholders, directors, officers and
    employees against all claims and losses that may arise out of
    acts performed or omitted for its activities in that capacity,
    except for any liability due to any gross negligence or
    intentional misconduct of the indemnified person or entity.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The transfer agent may resign, by notice to us, or be removed by
    us. The resignation or removal of the transfer agent will become
    effective upon our appointment of a successor transfer agent and
    registrar and its acceptance of the appointment. If no successor
    has been appointed and has accepted the appointment within
    30&#160;days after notice of the resignation or removal, our
    general partner may act as the transfer agent and registrar
    until a successor is appointed.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transfer
    of Common Units</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    By transfer of our common units in accordance with our
    partnership agreement, each transferee of our common units will
    be admitted as a unitholder with respect to the common units
    transferred when such transfer and admission is reflected in our
    books and records except in the circumstances described below.
    Additionally, each transferee of our common units:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    represents that the transferee has the capacity, power and
    authority to become bound by our partnership agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    automatically agrees to be bound by the terms and conditions of,
    and is deemed to have executed, our partnership
    agreement;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    gives the consents and approvals contained in our partnership
    agreement, such as the approval of all transactions and
    agreements that we are entering into in connection with our
    formation and this offering.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An assignee will become a substituted limited partner of our
    partnership for the transferred common units automatically upon
    the recording of the transfer on our books and records except in
    the circumstances described below. The general partner will
    cause any transfers to be recorded on our books and records no
    less frequently than quarterly. Although our general partner is
    not prevented from withholding its consent to an assignee
    requesting admission as a substituted limited partner, we do not
    anticipate that our general partner will exercise this right.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may, at our discretion, treat the nominee holder of a common
    unit as the absolute owner. In that case, the beneficial
    holder&#146;s rights are limited solely to those that it has
    against the nominee holder as a result of any agreement between
    the beneficial owner and the nominee holder.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    35
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Common units are securities and are transferable according to
    the laws governing transfers of securities. In addition to other
    rights acquired upon transfer, the transferor gives the
    transferee the right to become a substituted limited partner in
    our partnership for the transferred common units except in the
    circumstances described below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Until a common unit has been transferred on our books, we and
    the transfer agent, notwithstanding any notice to the contrary,
    may treat the record holder of the common unit as the absolute
    owner for all purposes, except as otherwise required by law or
    stock exchange regulations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We own an interstate pipeline that is subject to rate regulation
    of the Federal Energy Regulatory Commission, or FERC, and as a
    result our general partner has the right under our partnership
    agreement to institute procedures, by giving notice to each of
    our unitholders, that would require transferees of common units
    and, upon the request of our general partner, existing holders
    of our common units to certify that they are Eligible Holders.
    The purpose of these certification procedures would be to enable
    us to utilize a federal income tax expense as a component of the
    pipeline&#146;s rate base upon which tariffs may be established
    under FERC rate making policies applicable to entities that
    pass-through their taxable income to their owners. Eligible
    Holders are individuals or entities subject to United States
    federal income taxation on the income generated by us or
    entities not subject to United States federal income taxation on
    the income generated by us, so long as all of the entity&#146;s
    owners are subject to such taxation. If these tax certification
    procedures are implemented, transferees of common units will be
    required to fill out a properly completed transfer application
    certifying, and our general partner, acting on our behalf, may
    at any time require each unitholder to re-certify;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    that the transferee or unitholder is an individual or an entity
    subject to United States federal income taxation on the income
    generated by us;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    that, if the transferee unitholder is an entity not subject to
    United States federal income taxation on the income generated by
    us, as in the case, for example, of a mutual fund taxed as a
    regulated investment company or a partnership, all the
    entity&#146;s owners are subject to United States federal income
    taxation on the income generated by us.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event that this notice is given by our general partner,
    which we refer to as a &#147;FERC Notice,&#148; transfers of a
    common unit will not be recorded by the transfer agent or
    recognized by us unless the transferee executes and delivers a
    properly completed transfer application. By executing and
    delivering a transfer application, the transferee of common
    units:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    becomes the record holder of the common units and is an assignee
    until admitted into our partnership as a substituted limited
    partner;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    automatically requests admission as a substituted limited
    partner in our partnership;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    executes and agrees to be bound by the terms and conditions of
    our partnership agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    represent that the transferee has the capacity, power and
    authority to enter into our partnership agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    grants powers of attorney to the officers of our general partner
    and any liquidator of us as specified in our partnership
    agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    gives the consents, covenants, representations and approvals
    contained in our partnership agreement;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    certifies:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    that the transferee is an individual or is an entity subject to
    United States federal income taxation on the income generated by
    us;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    that, if the transferee is an entity not subject to United
    States federal income taxation on the income generated by us, as
    in the case, for example, of a mutual fund taxed as a regulated
    investment company or a partnership, all the entity&#146;s
    owners are subject to United States federal income taxation on
    the income generated by us.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    36
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following a FERC Notice, an assignee will become a substituted
    limited partner of our partnership for the transferred common
    units automatically upon the recording of the transfer on our
    books and records. Our general partner will cause any unrecorded
    transfers for which a properly completed and duly executed
    transfer application has been received to be recorded on our
    books and records no less frequently than quarterly.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following a FERC Notice, a transferee&#146;s broker, agent or
    nominee may, but is not obligated to, complete, execute and
    deliver a transfer application. We are entitled to treat the
    nominee holder of a common unit as the absolute owner. In that
    case, the beneficial holder&#146;s rights are limited solely to
    those that it has against the nominee holder as a result of any
    agreement between the beneficial owner and the nominee holder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following a FERC Notice, in addition to other rights acquired
    upon transfer, the transferor gives the transferee the right to
    request admission as a substituted limited partner in our
    partnership for the transferred common units. A purchaser or
    transferee of common units who does not execute and deliver a
    properly completed transfer application obtains only:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the right to assign the common unit to a purchaser or other
    transferee;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the right to transfer the right to seek admission as a
    substituted limited partner in our partnership for the
    transferred common units.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result, following a FERC Notice, a purchaser or transferee
    of common units who does not execute and deliver a properly
    completed transfer application:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    will not receive cash distributions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    will not be allocated any of our income, gain, deduction, losses
    or credits for federal income tax or other tax purposes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    may not receive some federal income tax information or reports
    furnished to record holders of common units;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    will have no voting rights;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    unless the common units are held in a nominee or &#147;street
    name&#148; account and the nominee or broker has executed and
    delivered a transfer application and certification as to itself
    and any beneficial holders.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The transferor of common units has a duty to provide the
    transferee with all information that may be necessary to
    transfer the common units. The transferor does not have a duty
    to ensure that the execution of the transfer application by the
    transferee and has no liability or responsibility if the
    transferee neglects or chooses not to execute and deliver a
    properly completed transfer application to the transfer agent.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Class&#160;B
    Units</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On March&#160;27, 2007, all of the outstanding Class&#160;B
    units were converted into common units and, as a result, there
    are no longer any outstanding Class&#160;B units.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    37
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Comparison
    of Rights of Holders of Our Common Units and ETP&#146;s Common
    Units</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table compares certain features of ETP&#146;s
    common units and our common units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="33%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="31%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="31%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>ETP&#146;s Common Units</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Our Common Units</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Taxation of Entity and Entity Owners
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    ETP is a flow-through entity that is not subject to an
    entity-level federal income tax.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Similarly, we are a flow-through entity that is not subject to
    an entity-level federal income tax.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    ETP common unitholders generally will be allocated an amount of
    federal taxable income for the cumulative period ending December
    31, 2008 related to ETP&#146;s operations that is expected to be
    less than the cumulative amount of cash distributions that they
    receive with respect to that period.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Similarly, our common unitholders will be allocated an amount of
    federal taxable income for the cumulative period ending December
    31, 2008 related to our operations that is expected to be less
    than the amount of cash distributions that they receive with
    respect to that period, although the ratio of taxable income
    allocated to our unitholders in relation to our cash
    distributions will be greater than the ratio of taxable income
    allocated to ETP&#146;s unitholders in relation to its cash
    distributions.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    ETP common unitholders will receive Schedule K-1s from ETP
    reflecting the unitholders&#146; share of ETP&#146;s items of
    income, gain, loss and deduction at the end of each calendar
    year.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Our common unitholders also will receive Schedule K-1s from us
    reflecting the unitholders&#146; share of our items of income,
    gain, loss and deduction at the end of each calendar year.
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Sources of Cash Flow
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    ETP is our subsidiary and may engage in acquisition and
    development activities that expand its business and operations.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Our cash-generating assets consist of our partnership interests
    in ETP, including incentive distribution rights, and we
    currently have no independent operations. Accordingly, our
    financial performance and our ability to pay cash distributions
    to our unitholders is currently directly dependent upon the
    performance of ETP. In the future, if we elect to develop
    independent operations, we may own assets or engage in
    businesses that compete directly or indirectly with ETP, except
    that ETP&#146;s partnership agreement prohibits us from engaging
    in the retail propane business in the United States.
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Limitation on Issuance of Additional Units
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    ETP may issue an unlimited number of additional partnership
    interests and other equity securities without obtaining
    unitholder approval.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Similarly, we may issue an unlimited number of additional
    partnership interests and other equity securities without
    obtaining unitholder approval.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP also has outstanding class&#160;E units, none of which are
    publicly traded. Please read &#147;Material Provisions of
    ETP&#146;s Partnership Agreement&#160;&#151;&#160;ETP
    Units&#148; for a discussion of other classes of ETP units.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    38
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "OUR CASH DISTRIBUTION POLICY" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='125'></A><B><FONT style="font-family: 'Times New Roman', Times">OUR
    CASH DISTRIBUTION POLICY</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Set forth below is a summary of our cash distribution, including
    a description of the significant provisions of our partnership
    agreement that relate to cash distributions as well as a
    description of restrictions on our ability to make cash
    distributions.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">General</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement requires that, within 50&#160;days
    after the end of each quarter, we distribute all of our
    available cash to the holders of record or our common units on
    the applicable record date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Available cash is defined in our partnership agreement and
    generally means, with respect to any calendar quarter, all cash
    on hand at the end of such quarter:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    less the amount of cash reserves necessary or appropriate, as
    determined in good faith by our general partner, to:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    satisfy general, administrative and other expenses and debt
    service requirements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    permit Energy Transfer Partners GP to make capital contributions
    to ETP in order to maintain its 2% general partner interest as
    required by ETP&#146;s partnership agreement upon the issuance
    of additional partnership securities by ETP;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    comply with applicable law or any debt instrument or other
    agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    provide funds for distributions to unitholders and our general
    partner in respect of any one or more of the next four
    quarters;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    otherwise provide for the proper conduct of our business;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    plus all cash on hand immediately prior to the date of the
    distribution of available cash for the quarter.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Rationale for our Cash Distribution
    Policy.</I>&#160;&#160;Our cash distribution policy reflects a
    basic judgment that our unitholders will be better served by our
    distributing our available cash rather than retaining it. It is
    important that you understand that our only cash-generating
    assets currently consist of partnership interests, including
    incentive distribution rights, in ETP from which we receive
    quarterly distributions. We currently have no independent
    operations outside of our interests in ETP. Because we believe
    we will have relatively low cash requirements for operating
    expenses and that we will finance any material capital
    investments from external financing sources, we believe that our
    investors are best served by distributing all of our available
    cash as described below. Because we are not subject to an
    entry-level federal income tax, we expect to have more cash to
    distribute to you than would be the case were we subject to tax.
    Our distribution policy is consistent with the terms of our
    partnership agreement, which requires that we distribute all of
    our available cash quarterly.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Restrictions and Limitations on our Ability to Change our
    Cash Distribution Policy</I>.&#160;&#160;There is no guarantee
    that unitholders will receive quarterly distributions from us.
    Our distribution policy is subject to certain restrictions and
    may be changed at any time. These restrictions include the
    following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our distribution policy is subject to restrictions on
    distributions under our credit facilities. Specifically, our
    credit facilities contain material financial tests and covenants
    that we will be required to satisfy. Should we be unable to
    comply with the restrictions under our credit facilities, we
    would be prohibited from making cash distributions to you
    notwithstanding our stated distribution policy.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    ETP&#146;s distribution policy is subject to restrictions on
    distributions under its credit agreements. Specifically,
    ETP&#146;s credit agreements contain material financial tests
    and covenants that it must satisfy. Should ETP be unable to
    comply with the restrictions under its credit agreements, ETP
    would be prohibited from making cash distributions to us, which
    in turn would prevent us from making cash distributions to you
    notwithstanding our stated distribution policy. In addition, ETP
    would enter into new credit agreements containing financial
    tests and covenants that are more difficult to satisfy than
    those described in this prospectus.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    39
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The board of directors of our general partner has the authority
    under our partnership agreement to establish reserves for the
    prudent conduct of our business and for future cash
    distributions to our unitholders, and the establishment of those
    reserves could result in a reduction in cash distributions to
    you from levels we currently anticipate pursuant to our stated
    distribution policy.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The board of directors of ETP&#146; s general partner has the
    authority under ETP&#146; s partnership agreement to establish
    reserves for the prudent conduct of ETP&#146;s business and for
    future cash distributions to ETP&#146;s unitholders, and the
    establishment of those reserves could result in a reduction in
    cash distributions that we would otherwise anticipate receiving
    from ETP, which in turn could result in a reduction in cash
    distributions to you from levels we currently anticipate
    pursuant to our stated distribution policy.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    While our partnership agreement requires us to distribute all of
    our available cash, our partnership agreement, including our
    cash distribution policy contained therein, may be amended by a
    vote of the holders of a majority of our common units. As of
    May&#160;31, 2007, our affiliates, excluding Enterprise GP
    Holdings L.P., own approximately 37.4% of our outstanding common
    units.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Even if our cash distribution policy is not modified or revoked,
    the amount of distributions paid under our cash distribution
    policy is subject to the determination of our general partner,
    taking into consideration the terms of our partnership agreement.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The amount of distributions paid under ETP&#146;s cash
    distribution policy is subject to the determination of
    ETP&#146;s general partner, taking into consideration the terms
    of its partnership agreement.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Under
    <FONT style="white-space: nowrap">Section&#160;17-607</FONT>
    of the Delaware Revised Uniform Limited Partnership Act, we may
    not make a distribution to you if the distribution would cause
    our liabilities to exceed the fair value of our assets.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We may lack sufficient cash to pay distributions to our
    unitholders due to increases in general and administrative
    expenses, principal and interest payments on our outstanding
    debt, tax expenses, working capital requirements and anticipated
    cash needs of us or ETP and its subsidiaries.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Our Cash Distribution Policy Limits Our Ability to
    Grow.</I>&#160;&#160;As with most other master limited
    partnerships, because we distribute all of our available cash,
    our growth may not be as fast as businesses that reinvest their
    available cash to expand ongoing operations. In fact, since our
    only cash-generating assets currently consist of our partnership
    interests in ETP, including incentive distribution rights, our
    growth initially will be dependent upon ETP&#146;s ability to
    increase its quarterly distribution per unit. If we issue
    additional units or incur debt to fund acquisitions and growth
    capital expenditures, the payment of distributions on those
    additional units or interest on that debt could increase the
    risk that we will be unable to maintain or increase our per unit
    distribution level.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>ETP&#146;s Ability to Grow is Dependent on its Ability to
    Access External Growth Capital</I>.&#160;&#160;Consistent with
    the terms of its partnership agreement, ETP has distributed to
    its partners most of the cash generated by its operations. As a
    result, it has relied upon external financing sources, including
    commercial borrowings and other debt and equity issuances, to
    fund its acquisition and growth capital expenditures.
    Accordingly, to the extent ETP is unable to finance growth
    externally, its cash distribution policy will significantly
    impair its ability to grow. In addition, to the extent ETP
    issues additional units in connection with any acquisitions or
    growth capital expenditures, the payment of distributions on
    those additional units may increase the risk that ETP will be
    unable to maintain or increase its per unit distribution level,
    which in turn may impact the available cash that we have to
    distribute to our unitholders. The incurrence of additional
    commercial or other debt to finance its growth strategy would
    result in increased interest expense to ETP, which in turn may
    impact the available cash that we have to distribute to our
    unitholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">General
    Partner Interest</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the date of this prospectus, our general partner is
    entitled to approximately 0.5% of all distributions that we make
    prior to our liquidation. This general partner interest is
    represented by 692,065 general partner units. The general
    partner&#146;s initial 0.5% interest in these distributions will
    be proportionately reduced if we
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    40
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    issue additional units in the future and our general partner
    does not contribute a proportionate amount of capital to us to
    maintain its 0.5% general partner interest. Our general partner
    has the right, but not the obligation, to contribute a
    proportionate amount of capital to us to maintain its current
    general partner interest.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Adjustments
    to Capital Accounts</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will make adjustments to capital accounts upon the issuance
    of additional units. In doing so, we will allocate any
    unrealized and, for tax purposes, unrecognized gain or loss
    resulting from the adjustments to the unitholders and the
    general partner in the same manner as we allocate gain or loss
    upon liquidation. In the event that we make positive adjustments
    to the capital accounts upon the issuance of additional units,
    we will allocate any later negative adjustments to the capital
    accounts resulting from the issuance of additional units or upon
    our liquidation in a manner which results, to the extent
    possible, in the general partner&#146;s capital account balances
    equaling the amount which they would have been if no earlier
    positive adjustments to the capital accounts had been made.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions
    of Cash upon Liquidation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we dissolve in accordance with the partnership agreement, we
    will sell or otherwise dispose of our assets in a process called
    a liquidation. We will first apply the proceeds of liquidation
    to the payment of our creditors in the order of priority
    provided in the partnership agreement and by law and,
    thereafter, we will distribute any remaining proceeds to the
    unitholders and our general partner in accordance with their
    respective capital account balances, as adjusted to reflect any
    gain or loss upon the sale or other disposition of our assets in
    liquidation.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    41
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "ETP&#146;S CASH DISTRIBUTION POLICY" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='126'></A><B><FONT style="font-family: 'Times New Roman', Times">ETP&#146;S
    CASH DISTRIBUTION POLICY</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following is a description of the relative rights and
    preferences of holders of ETP&#146;s common units and ETP&#146;s
    general partner in and to cash distributions.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions
    of Available Cash</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>General.</I>&#160;&#160;ETP distributes all of its
    &#147;available cash&#148; to its unitholders and its general
    partner within 45&#160;days following the end of each fiscal
    quarter.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Definition of Available Cash.</I>&#160;&#160;Available cash
    of ETP is defined in ETP&#146;s partnership agreement and
    generally means, with respect to any calendar quarter, all cash
    on hand at the end of such quarter:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    less the amount of cash reserves that are necessary or
    appropriate in the reasonable discretion of the general partner
    of ETP to:
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provide for the proper conduct of its business;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    comply with applicable law or any debt instrument or other
    agreement (including reserves for future capital expenditures
    and for its future credit needs); or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provide funds for distributions to ETP&#146;s unitholders and
    its general partner in respect of any one or more of the next
    four quarters;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    plus all of ETP&#146;s cash on hand on the date of determination
    of available cash for the quarter resulting from working capital
    borrowings of ETP made after the end of the quarter. Working
    capital borrowings are generally borrowings that are made under
    ETP&#146;s credit facilities and in all cases are used solely
    for working capital purposes or to pay distributions to
    ETP&#146;s partners.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Operating
    Surplus and Capital Surplus</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>General.</I>&#160;&#160;All cash distributed to ETP&#146;s
    unitholders is characterized as either &#147;operating
    surplus&#148; or &#147;capital surplus.&#148; ETP distributes
    available cash from operating surplus differently than its
    available cash from capital surplus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Definition of Operating Surplus.</I>&#160;&#160;ETP&#146;s
    operating surplus for any period generally means:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    its cash balance on the closing date of its initial public
    offering in 1996; plus
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    $10.0&#160;million (as described below); plus
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all of ETP&#146;s cash receipts since the closing of its initial
    public offering, excluding cash from interim capital
    transactions such as borrowings that are not working capital
    borrowings, sales of equity and debt securities and sales or
    other dispositions of assets outside the ordinary course of
    business; plus
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    ETP&#146;s working capital borrowings made after the end of a
    quarter but before the date of determination of operating
    surplus for the quarter; less
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all of ETP&#146;s operating expenditures after the closing of
    its initial public offering, including the repayment of working
    capital borrowings, but not the repayment of other borrowings,
    and including maintenance capital expenditures; less
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount of ETP&#146;s cash reserves that the general partner
    of ETP deems necessary or advisable to provide funds for future
    operating expenditures.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Definition of Capital Surplus.</I>&#160;&#160;Generally,
    ETP&#146;s capital surplus will be generated only by:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    borrowings other than working capital borrowings;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    sales of ETP&#146;s of debt and equity securities;&#160;and
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    42
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    ETP&#146;s sales or other disposition of assets for cash, other
    than inventory, accounts receivable and other current assets
    sold in the ordinary course of business or as part of normal
    retirements or replacements of assets.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Characterization of Cash Distributions.</I>&#160;&#160;ETP
    treats all of its available cash distributed as coming from its
    operating surplus until the sum of all available cash
    distributed since it began operations equals the operating
    surplus as of the most recent date of determination of available
    cash. ETP treats any amount distributed in excess of operating
    surplus, regardless of its source, as capital surplus. As
    reflected above, operating surplus includes $10.0&#160;million
    in addition to its cash balance on the closing date of its
    initial public offering in 1996, cash receipts from its
    operations and cash from working capital borrowings. This amount
    does not reflect actual cash on hand that is available for
    distribution to its unitholders. Rather, it is a provision that
    enables ETP, if it chooses, to distribute as operating surplus
    up to $50.0&#160;million of cash we receive in the future from
    non-operating sources, such as asset sales, issuances of
    securities, and long-term borrowings, that would otherwise be
    distributed as capital surplus. We have not made, and we do not
    anticipate that we will make, any distributions from capital
    surplus.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Incentive
    Distribution Rights</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s incentive distribution rights represent the
    contractual right of the general partner of ETP to receive a
    specified percentage of quarterly distributions of available
    cash from operating surplus after the minimum quarterly
    distribution has been paid by ETP. Please read
    &#147;&#151;&#160;Distributions of Available Cash from Operating
    Surplus&#148; below. ETP&#146;s general partner owns all of the
    incentive distribution rights, except that in conjunction with
    the August 2000 transaction with Energy Transfer Partners GP,
    L.P., ETP issued 1,000,000 class&#160;C units to Heritage
    Holdings, its general partner at that time, in conversion of
    that portion of Heritage Holdings&#146; incentive distribution
    rights that entitled it to receive any distribution made by ETP
    of funds attributable to the net amount received by ETP in
    connection with the settlement, judgment, award or other final
    nonappealable resolution of the SCANA litigation. In January
    2004, the class&#160;C units were distributed by Heritage
    Holdings to the owners of its equity interests. On July&#160;14,
    2006, all 1,000,000 outstanding class&#160;C units were retired
    and cancelled.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions
    of Available Cash from Operating Surplus</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP is required to make distributions of its available cash from
    operating surplus for any quarter in the following manner:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>First</I>, 98% to all common, class&#160;E unitholders of
    ETP, in accordance with their percentage interests, and 2% to
    the general partner, until each common unit has received $0.25
    per unit for such quarter (the &#147;minimum quarterly
    distribution&#148;);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Second</I>, 98% to all common, class&#160;E unitholders of
    ETP, in accordance with their percentage interests, and 2% to
    the general partner, until each common unit has received $0.275
    per unit for such quarter (the &#147;first target cash
    distribution&#148;);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Third</I>, 85% to all common, class&#160;E unitholders of
    ETP, in accordance with their percentage interests, 13% to the
    holders of incentive distribution rights, pro rata, and 2% to
    the general partner, until each common unit has received $0.3175
    per unit for such quarter (the &#147;second target cash
    distribution&#148;);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Fourth</I>, 75% to all common, class&#160;E unitholders of
    ETP, in accordance with their percentage interests, 23% to the
    holders of incentive distribution rights, pro rata, and 2% to
    the general partner, until each common unit has received $0.4125
    per unit for such quarter (the &#147;third target cash
    distribution&#148;);&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Fifth</I>, thereafter, 50% to all common, class&#160;E
    unitholders of ETP, in accordance with their percentage
    interests, 48% to the holders of incentive distribution rights,
    pro rata, and 2% to the general partner.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Notwithstanding the foregoing, the distributions to the
    class&#160;E unitholders may not exceed $1.41 per unit per year.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    43
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions
    of Available Cash from Capital Surplus</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP will make distributions of its available cash from capital
    surplus, if any, in the following manner:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>First</I>, 98% to all of its unitholders, pro rata, and 2% to
    its general partner, until ETP distributes for each ETP common
    unit, an amount of available cash from capital surplus equal to
    its initial public offering price;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Thereafter</I>, ETP will make all distributions of its
    available cash from capital surplus as if they were from
    operating surplus.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s partnership agreement treats a distribution of
    capital surplus as the repayment of the initial unit price from
    the initial public offering, which is a return of capital. The
    initial public offering price per ETP common unit less any
    distributions of capital surplus per unit is referred to as the
    &#147;unrecovered capital&#148; of ETP.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If ETP combines its units into fewer units or subdivide its
    units into a greater number of units, ETP will proportionately
    adjust its minimum quarterly distribution; its target cash
    distribution levels; and its unrecovered capital.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For example, if a two-for-one split of the common units of ETP
    should occur, the unrecovered capital of ETP would each be
    reduced to 50% of its initial level. ETP will not make any
    adjustment by reason of its issuance of additional units for
    cash or property.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On January&#160;14, 2005, ETP&#146;s general partner announced a
    two-for-one split of its common units that was effected on
    March&#160;15, 2005. As a result, the minimum quarterly
    distribution and the target cash distribution levels of ETP were
    reduced to 50% of their initial levels. The adjusted minimum
    quarterly distribution and the adjusted target cash distribution
    levels of ETP are reflected in the discussion above under the
    caption &#147;Distributions of Available Cash from Operating
    Surplus.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, if legislation is enacted or if existing law is
    modified or interpreted in a manner that causes ETP to become
    taxable as a corporation or otherwise subject to taxation as an
    entity for federal, state or local income tax purposes, ETP will
    reduce its minimum quarterly distribution and the target cash
    distribution levels by multiplying the same by one minus the sum
    of the highest marginal federal corporate income tax rate that
    could apply and any increase in the effective overall state and
    local income tax rates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions
    of Cash Upon Liquidation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>General.</I>&#160;&#160;If ETP dissolves in accordance with
    its partnership agreement, it will sell or otherwise dispose of
    its assets in a process called liquidation. ETP will first apply
    the proceeds of its liquidation to the payment of its creditors.
    ETP will distribute any remaining proceeds to its unitholders
    and its general partner, in accordance with their capital
    account balances, as adjusted to reflect any gain or loss upon
    the sale or other disposition of its assets in liquidation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any further net gain recognized upon liquidation will be
    allocated in a manner that takes into account the incentive
    distribution rights of ETP&#146;s general partner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Manner of Adjustments for Gain.</I>&#160;&#160;The manner of
    the adjustment for gain is set forth in ETP&#146;s partnership
    agreement in the following manner:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>First</I>, to the general partner and the holders of units of
    ETP who have negative balances in their capital accounts to the
    extent of and in proportion to those negative balances;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Second</I>, 98% to the common unitholders of ETP, pro rata,
    and 2% to the general partner of ETP, until the capital account
    for each common unit is equal to the sum of:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    its unrecovered capital;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    the amount of the minimum quarterly distribution of ETP for the
    quarter during which our liquidation occurs;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    44
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Third</I>, 98% to all unitholders of ETP, pro rata, and 2% to
    the general partner of ETP, until we allocate under this
    paragraph an amount per ETP unit equal to:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    the sum of the excess of the first target cash distribution per
    ETP unit over the minimum quarterly distribution per ETP unit
    for each quarter of our existence; less
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    the cumulative amount per ETP unit of any distributions of
    ETP&#146;s available cash from operating surplus in excess of
    the minimum quarterly distribution per ETP unit that it
    distributed 98% to its unitholders, pro rata, and 2% to its
    general partner, for each quarter of its existence;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Fourth</I>, 85% to all unitholders of ETP, pro rata, 13% to
    the holders of the incentive distribution rights of ETP, pro
    rata, and 2% to the general partner of ETP, until ETP allocates
    under this paragraph an amount per ETP unit equal to:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    the sum of the excess of the second target cash distribution per
    ETP unit over the first target cash distribution per ETP unit
    for each quarter of ETP&#146;s existence; less
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    the cumulative amount per ETP unit of any distributions of
    ETP&#146;s available cash from operating surplus in excess of
    the first target cash distribution per ETP unit that it
    distributed 85% to the unitholders of ETP, pro rata, 13% to the
    holders of the incentive distribution rights of ETP, pro rata,
    and 2% to the general partner of ETP for each quarter of its
    existence;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Fifth</I>, 75% to all unitholders of ETP, pro rata, 23% to
    the holders of the incentive distribution rights of ETP, pro
    rata, and 2% to the general partner of ETP, until ETP allocates
    under this paragraph an amount per ETP unit equal to:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    the sum of the excess of the third target cash distribution per
    ETP unit over the second target cash distribution per ETP unit
    for each quarter of its existence; less
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>&#149;&#160;</B>
</TD>
    <TD align="left">
    the cumulative amount per ETP unit of any distributions of
    ETP&#146;s available cash from operating surplus in excess of
    the second target cash distribution per ETP unit that it
    distributed 75% to the unitholders of ETP, pro rata, 23% to the
    holders of the incentive distribution rights of ETP, pro rata,
    and 2% to the general partner of ETP for each quarter of its
    existence;&#160;and
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Sixth</I>, thereafter, 50% to all unitholders of ETP, pro
    rata, 48% to the holders of the incentive distribution rights of
    ETP, pro rata, and 2% to the general partner of ETP.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Manner of Adjustments for Losses.</I>&#160;&#160;Upon
    ETP&#146;s liquidation, ETP will generally allocate any loss to
    its general partner and its unitholders in the following manner:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>First</I>, 98% to the holders of common units of ETP in
    proportion to the positive balances in their capital accounts
    and 2% to the general partner of ETP, until the capital accounts
    of the common unitholders of ETP have been reduced to
    zero;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Second</I>, thereafter, 100% to the general partner of ETP.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Adjustments to Capital Accounts upon the Issuance of
    Additional Units.</I>&#160;&#160;ETP will make adjustments to
    its capital accounts upon its issuance of additional units. In
    doing so, ETP will allocate any unrealized and, for tax
    purposes, unrecognized gain or loss resulting from the
    adjustments to its unitholders and its general partner in the
    same manner as it allocates gain or loss upon liquidation. In
    the event that ETP makes positive adjustments to its capital
    accounts upon its issuance of additional units, ETP will
    allocate any later negative adjustments to its capital accounts
    resulting from its issuance of additional units or upon its
    liquidation in a manner which results, to the extent possible,
    in its general partner&#146;s capital account balances equaling
    the amount which they would have been if no earlier positive
    adjustments to its capital accounts had been made.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    45
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "MATERIAL PROVISIONS OF OUR PARTNERSHIP AGREEMENT" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='127'></A><B><FONT style="font-family: 'Times New Roman', Times">MATERIAL
    PROVISIONS OF OUR PARTNERSHIP AGREEMENT</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a summary of the material provisions of our
    partnership agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We summarize the following provisions of our partnership
    agreement elsewhere in this prospectus:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    with regard to rights of holders of units, please read
    &#147;Description of Our Common Units;&#148;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    with regard to allocations of taxable income and other matters,
    please read &#147;Material Tax Consequences.&#148;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Organization
    and Duration</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We were formed in September 2002 as La&#160;Grange Energy, L.P.,
    a Texas limited partnership. In February 2004, we changed our
    name to Energy Transfer Company, L.P. In August 2005, we
    converted from a Texas limited partnership to a Delaware limited
    partnership and changed our name to Energy Transfer Equity, L.P.
    We have a perpetual existence.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Purpose</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under our partnership agreement, we are permitted to engage,
    directly or indirectly, in any business activity that is
    approved by our general partner and that lawfully may be
    conducted by a limited partnership organized under Delaware law,
    provided that our general partner may not cause us to engage,
    directly or indirectly, in any business activity that our
    general partner determines would cause us to be treated as an
    association taxable as a corporation or otherwise taxable as an
    entity for federal income tax purposes.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Power of
    Attorney</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each limited partner, and each person who acquires a unit from a
    unitholder, by accepting the unit, automatically grants to our
    general partner and, if appointed, a liquidator, a power of
    attorney to, among other things, execute and file documents
    required for our qualification, continuance or dissolution. The
    power of attorney also grants the authority to amend, and to
    make consents and waivers under, our partnership agreement.
    Please read &#147;&#151;&#160;Amendments to Our Partnership
    Agreement.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Capital
    Contributions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unitholders are not obligated to make additional capital
    contributions, except as described below under
    &#147;&#151;&#160;Limited Liability.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Limited
    Liability</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Assuming that a limited partner does not participate in the
    control of our business within the meaning of the Delaware Act
    and that he otherwise acts in conformity with the provisions of
    our partnership agreement, his liability under the Delaware Act
    will be limited, subject to possible exceptions, to the amount
    of capital he is obligated to contribute to us for his units
    plus his share of any undistributed profits and assets. If it
    were determined, however, that the right, or exercise of the
    right, by the limited partners as a group:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to remove or replace the general partner;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to approve some amendments to the partnership agreement;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to take other action under the partnership agreement;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    constituted &#147;participation in the control&#148; of our
    business for the purposes of the Delaware Act, then the limited
    partners could be held personally liable for our obligations
    under the laws of Delaware, to the same extent as the general
    partner. This liability would extend to persons who transact
    business with us and reasonably believe that the limited partner
    is a general partner. Neither our partnership agreement nor the
    Delaware Act specifically provides for legal recourse against
    the general partner if a limited partner were to lose limited
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    46
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    liability through any fault of the general partner. While this
    does not mean that a limited partner could not seek legal
    recourse, we know of no precedent for this type of a claim in
    Delaware case law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the Delaware Act, a limited partnership may not make a
    distribution to a partner if, after the distribution, all
    liabilities of the limited partnership, other than liabilities
    to partners on account of their partnership interests and
    liabilities for which the recourse of creditors is limited to
    specific property of the partnership, would exceed the fair
    value of the assets of the limited partnership. For the purpose
    of determining the fair value of the assets of a limited
    partnership, the Delaware Act provides that the fair value of
    property subject to liability for which recourse of creditors is
    limited shall be included in the assets of the limited
    partnership only to the extent that the fair value of that
    property exceeds the nonrecourse liability. The Delaware Act
    provides that a limited partner who receives a distribution and
    knew at the time of the distribution that the distribution was
    in violation of the Delaware Act shall be liable to the limited
    partnership for the amount of the distribution for three years.
    Under the Delaware Act, a substituted limited partner of a
    limited partnership is liable for the obligations of his
    assignor to make contributions to the partnership, except that
    such person is not obligated for liabilities unknown to him at
    the time he became a limited partner and that could not be
    ascertained from the partnership agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Limitations on the liability of limited partners for the
    obligations of a limited partner have not been clearly
    established in many jurisdictions. While we currently have no
    operations distinct from ETP, if in the future, by our ownership
    in an operating company or otherwise, it were determined that we
    were conducting business in any state without compliance with
    the applicable limited partnership or limited liability company
    statute, or that the right or exercise of the right by the
    limited partners as a group to remove or replace the general
    partner, to approve some amendments to our partnership
    agreement, or to take other action under our partnership
    agreement constituted &#147;participation in the control&#148;
    of our business for purposes of the statutes of any relevant
    jurisdiction, then the limited partners could be held personally
    liable for our obligations under the law of that jurisdiction to
    the same extent as the general partner under the circumstances.
    We will operate in a manner that the general partner considers
    reasonable and necessary or appropriate to preserve the limited
    liability of the limited partners.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Voting
    Rights</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a summary of the unitholder vote required for
    the matters specified below. In voting their units, affiliates
    of our general partner will have no fiduciary duty or obligation
    whatsoever to us or the limited partners, including any duty to
    act in good faith or in the best interests of us or the limited
    partners.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Issuance of additional units
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    No approval right.
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Amendment of our partnership agreement
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Certain amendments may be made by our general partner without
    the approval of our unitholders. Other amendments generally
    require the approval of a majority of our outstanding units.
    Please read &#147;&#151;&#160;Amendments to Our Partnership
    Agreement.&#148;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Merger of our partnership or the sale of all or substantially
    all of our assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    A majority of our outstanding units in certain circumstances.
    Please read &#147;&#151;&#160;Merger, Sale or Other Disposition
    of Assets.&#148;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Dissolution of our partnership
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    A majority of our outstanding units. Please read
    &#147;&#151;&#160;Termination or Dissolution.&#148;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Reconstitution of our partnership upon dissolution
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    A majority of our outstanding units. Please read
    &#147;&#151;&#160;Termination or Dissolution.&#148;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Withdrawal of our general partner
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Under most circumstances, the approval of a majority of the
    units, excluding units held by our general partner and its
    affiliates, is required for the withdrawal of the general
    partner prior to June 30, 2015 in a manner that would cause a
    dissolution of our partnership. Please read
    &#147;&#151;&#160;Withdrawal or Removal of Our general
    partner.&#148;
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    47
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Removal of our general partner
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Not less than
    66<FONT style="vertical-align: top; font-size: 70&#37;">2</FONT>/<FONT style="font-size: 70&#37;">3</FONT>
    of the outstanding units, including units held by our general
    partner and its affiliates. Please read
    &#147;&#151;&#160;Withdrawal or Removal of Our general
    partner.&#148;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Transfer of the general partner interest
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Our general partner may transfer all, but not less than all, of
    its general partner interest in us without a vote of our
    unitholders to (i) an affiliate (other than an individual) or
    (ii) another entity in connection with its merger or
    consolidation with or into, or sale of all or substantially all
    of its assets to, such person. The approval of a majority of the
    units, excluding units held by the general partner and its
    affiliates, is required in other circumstances for a transfer of
    the general partner interest to a third party prior to December
    31, 2015. Please read &#147;&#151;&#160;Transfer of General
    Partner Interest.&#148;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Transfer of ownership interests in our general partner
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    No approval required at any time. Please read
    &#147;&#151;&#160;Transfer of Ownership Interests in our general
    partner.&#148;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Issuance
    of Additional Securities</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement authorizes us to issue an unlimited
    number of additional limited partner interests and other equity
    securities that are senior to, equal in rank with or junior to
    our units on terms and conditions established by our general
    partner in its sole discretion without the approval of our
    unitholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is possible that we will fund acquisitions through the
    issuance of additional units or other equity securities. Holders
    of any additional units we issue will be entitled to share
    equally with the then-existing holders of units in our cash
    distributions. In addition, the issuance of additional
    partnership interests may dilute the value of the interests of
    the then-existing holders of units in our net assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In accordance with Delaware law and the provisions of our
    partnership agreement, we may also issue additional partnership
    interests that, in the sole discretion of our general partner,
    may have special voting rights to which units are not entitled.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon issuance of additional units or other partnership
    securities, our general partner will have the option but not the
    obligation to make additional capital contributions to the
    extent it desires to maintain its general partner interest in
    us. Our general partner and its affiliates have the right, which
    they may from time to time assign in whole or in part to any of
    their affiliates, to purchase units or other equity securities
    whenever, and on the same terms that, we issue those securities
    to persons other than our general partner and its affiliates, to
    the extent necessary to maintain their percentage interests in
    us that existed immediately prior to the issuance. As of
    May&#160;31, 2007, affiliates of our general partner, excluding
    Enterprise GP Holdings L.P., hold approximately 37.4% of our
    outstanding common units. The holders of units do not have
    preemptive rights to acquire additional units or other
    partnership interests in us.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Amendments
    to Our Partnership Agreement</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">General</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Amendments to our partnership agreement may be proposed only by
    or with the consent of our general partner. However, our general
    partner will have no duty or obligation to propose any amendment
    and may decline to do so free of any fiduciary duty or
    obligation whatsoever to us or the limited partners, including
    any duty to act in good faith or in the best interests of us or
    the limited partners. In order to adopt a proposed amendment,
    other than the amendments discussed below, our general partner
    is required to seek written approval of the holders of the
    number of units required to approve the amendment or call a
    meeting of the limited partners to consider and vote upon the
    proposed amendment. Except as described below, an amendment must
    be approved by a majority of our outstanding units.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    48
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Prohibited
    Amendments</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No amendment may be made that would:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;enlarge the obligations of any limited partner without
    its consent, unless approved by at least a majority of the type
    or class of limited partner interests so affected;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;enlarge the obligations of, restrict in any way any
    action by or rights of, or reduce in any way the amounts
    distributable, reimbursable or otherwise payable by us to our
    general partner or any of its affiliates without the consent of
    our general partner, which may be given or withheld at its
    option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The provision of our partnership agreement preventing the
    amendments having the effects described in clauses&#160;(1) or
    (2)&#160;above can be amended upon the approval of the holders
    of at least 90% of the outstanding units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">No
    Unitholder Approval</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner may generally make amendments to our
    partnership agreement without the approval of any limited
    partner to reflect:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;a change in the name of the partnership, the location
    of the partnership&#146;s principal place of business, the
    partnership&#146;s registered agent or its registered office;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;the admission, substitution, withdrawal or removal of
    partners in accordance with our partnership agreement;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;a change that, in the sole discretion of our general
    partner, is necessary or advisable for the partnership to
    qualify or to continue our qualification as a limited
    partnership or a partnership in which the limited partners have
    limited liability under the laws of any state or to ensure that
    the partnership will not be treated as an association taxable as
    a corporation or otherwise taxed as an entity for federal income
    tax purposes;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (4)&#160;an amendment that is necessary, in the opinion of our
    counsel, to prevent the partnership or our general partner or
    its directors, officers, agents or trustees, from in any manner
    being subjected to the provisions of the Investment Company Act
    of 1940, the Investment Advisors Act of 1940, or &#147;plan
    asset&#148; regulations adopted under the Employee Retirement
    Income Security Act of 1974, whether or not substantially
    similar to plan asset regulations currently applied or proposed;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (5)&#160;any amendment expressly permitted in our partnership
    agreement to be made by our general partner acting alone;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (6)&#160;an amendment effected, necessitated or contemplated by
    a merger agreement that has been approved under the terms of our
    partnership agreement;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (7)&#160;any amendment that, in the discretion of our general
    partner, is necessary or advisable for the formation by the
    partnership of, or its investment in, any corporation,
    partnership or other entity, as otherwise permitted by our
    partnership agreement;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (8)&#160;a change in our fiscal year or taxable year and related
    changes;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (9)&#160;certain mergers or conveyances set forth in our
    partnership agreement;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (10)&#160;any other amendments substantially similar to any of
    the matters described in (1)&#160;through (9)&#160;above.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, our general partner may make amendments to our
    partnership agreement without the approval of any limited
    partner or assignee if our general partner determines that those
    amendments:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;do not adversely affect our limited partners in any
    material respect;
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    49
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;are necessary or advisable to satisfy any requirements,
    conditions or guidelines contained in any opinion, directive,
    order, ruling or regulation of any federal or state agency or
    judicial authority or contained in any federal or state statute;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;are necessary or advisable to facilitate the trading of
    limited partner interests or to comply with any rule,
    regulation, guideline or requirement of any securities exchange
    on which the limited partner interests are or will be listed for
    trading, compliance with any of which our general partner deems
    to be in the partnership&#146;s best interest and the best
    interest of our limited partners;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (4)&#160;are necessary or advisable for any action taken by our
    general partner relating to splits or combinations of units
    under the provisions of our partnership agreement; or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (5)&#160;are required to effect the intent of the provisions of
    our partnership agreement or are otherwise contemplated by our
    partnership agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Opinion
    of Counsel and Unitholder Approval</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner will not be required to obtain an opinion of
    counsel that an amendment will not result in a loss of limited
    liability to the limited partners or result in our being treated
    as an entity for federal income tax purposes in connection with
    any of the amendments described under
    &#147;&#151;&#160;Amendments to Our Partnership
    Agreement&#160;&#151; No Unitholder Approval.&#148; No other
    amendments to our partnership agreement requiring the approval
    of holders of at least 90% of the outstanding units will become
    effective unless we first obtain an opinion of counsel to the
    effect that the amendment will not affect the limited liability
    under applicable law of any of our limited partners. Any
    amendment that reduces the voting percentage required to take
    any action must be approved by the affirmative vote of limited
    partners constituting not less than the voting requirement
    sought to be reduced.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Merger,
    Sale or Other Disposition of Assets</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement generally prohibits our general
    partner, without the prior approval of a majority of our
    outstanding units, from causing us to, among other things, sell,
    exchange or otherwise dispose of all or substantially all of our
    assets in a single transaction or a series of related
    transactions, including by way of merger, consolidation or other
    combination, or approving on our behalf the sale, exchange or
    other disposition of all or substantially all of the assets of
    our subsidiaries. Our general partner may, however, mortgage,
    pledge, hypothecate or grant a security interest in all or
    substantially all of our assets without that approval. Our
    general partner may also sell all or substantially all of our
    assets under a foreclosure or other realization upon those
    encumbrances without that approval.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If conditions specified in our partnership agreement are
    satisfied, our general partner may merge us or any of our
    subsidiaries into, or convey some or all of our assets to, a
    newly formed entity if the sole purpose of that merger or
    conveyance is to effect a mere change in our legal form into
    another limited liability entity. The unitholders are not
    entitled to dissenters&#146; rights of appraisal under our
    partnership agreement or applicable Delaware law in the event of
    a merger or consolidation, a sale of substantially all of our
    assets or any other transaction or event.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Termination
    or Dissolution</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will continue as a limited partnership until terminated under
    our partnership agreement. We will dissolve upon:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;the election of our general partner to dissolve us, if
    approved by the holders of a majority of our outstanding units,
    excluding those units held by our general partner and its
    affiliates;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;there being no limited partners, unless we are
    continued without dissolution in accordance with applicable
    Delaware law;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;the entry of a decree of judicial dissolution of our
    partnership;&#160;or
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    50
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (4)&#160;the withdrawal or removal of our general partner or any
    other event that results in its ceasing to be our general
    partner other than by reason of a transfer of its general
    partner interest in accordance with our partnership agreement or
    withdrawal or removal following approval and admission of a
    successor.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon a dissolution under clause&#160;(4) above, the holders of a
    majority of our outstanding units may also elect, excluding any
    units held by our general partner and its affiliates, within
    specific time limitations, to continue our business on the same
    terms and conditions described in our partnership agreement by
    appointing as a successor general partner an entity approved by
    the holders of a majority of our outstanding units, excluding
    those units held by our general partner and its affiliates,
    subject to receipt by us of an opinion of counsel to the effect
    that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the action would not result in the loss of limited liability of
    any limited partner;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    neither our partnership nor Energy Transfer Partners would be
    treated as an association taxable as a corporation or otherwise
    be taxable as an entity for federal income tax purposes upon the
    exercise of that right to continue.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Liquidation
    and Distribution of Proceeds</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon our dissolution, unless we are reconstituted and continued
    as a new limited partnership, the person authorized to wind up
    our affairs (the liquidator) will, acting with all the powers of
    our general partner that the liquidator deems necessary or
    desirable in its good faith judgment, liquidate our assets. The
    proceeds of the liquidation will be applied as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>first</I>, towards the payment of all of our creditors and
    the creation of a reserve for contingent liabilities;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>then</I>, to all partners in accordance with the positive
    balance in the respective capital accounts.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under some circumstances and subject to some limitations, the
    liquidator may defer liquidation or distribution of our assets
    for a reasonable period of time. If the liquidator determines
    that a sale would be impractical or would cause a loss to our
    partners, our general partner may distribute assets in kind to
    our partners.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Withdrawal
    or Removal of Our General Partner</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as described below, our general partner has agreed not to
    withdraw voluntarily as our general partner prior to
    December&#160;31, 2015 without obtaining the approval of a
    majority of our outstanding units, excluding those held by our
    general partner and its affiliates, and furnishing an opinion of
    counsel regarding limited liability and tax matters. On or after
    December&#160;31, 2015, our general partner may withdraw as
    general partner without first obtaining approval of any
    unitholder by giving 90&#160;days&#146; written notice, and that
    withdrawal will not constitute a violation of our partnership
    agreement. In addition, our general partner may withdraw without
    unitholder approval upon 90&#160;days&#146; notice to our
    limited partners if at least 50% of our outstanding units are
    held or controlled by one person and its affiliates other than
    our general partner and its affiliates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon the voluntary withdrawal of our general partner, the
    holders of a majority of our outstanding units, excluding the
    units held by the withdrawing general partner and its
    affiliates, may elect a successor to the withdrawing general
    partner. If a successor is not elected, or is elected but an
    opinion of counsel regarding limited liability and tax matters
    cannot be obtained, we will be dissolved, wound up and
    liquidated, unless within 90&#160;days after that withdrawal,
    the holders of a majority of our outstanding units, excluding
    the units held by the withdrawing general partner and its
    affiliates, agree to continue our business and to appoint a
    successor general partner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner may not be removed unless that removal is
    approved by not less than
    66<FONT style="vertical-align: top; font-size: 70&#37;">2</FONT>/<FONT style="font-size: 70&#37;">3</FONT>%
    of our outstanding units, including units held by our general
    partner and its affiliates, and we receive an opinion of counsel
    regarding limited liability and tax matters. In addition, if our
    general partner is removed as our general partner under
    circumstances where cause does not exist and units held by our
    general partner and its affiliates
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    51
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    are not voted in favor of such removal, our general partner will
    have the right to convert its general partner interest into
    units or to receive cash in exchange for such interests. Any
    removal of this kind is also subject to the approval of a
    successor general partner by a majority of our outstanding
    units, including those held by our general partner and its
    affiliates. The ownership of more than
    33<FONT style="vertical-align: top; font-size: 70&#37;">1</FONT>/<FONT style="font-size: 70&#37;">3</FONT>%
    of the outstanding units by our general partner and its
    affiliates would give it the practical ability to prevent its
    removal. Affiliates of our general partner, excluding Enterprise
    GP Holdings L.P., own approximately 37.4% of the outstanding
    common units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event of removal of a general partner under circumstances
    where cause exists or withdrawal of a general partner where that
    withdrawal violates our partnership agreement, a successor
    general partner will have the option to purchase the general
    partner interest of the departing general partner for a cash
    payment equal to its fair market value. Under all other
    circumstances where a general partner withdraws or is removed by
    the limited partners, the departing general partner will have
    the option to require the successor general partner to purchase
    the general partner interest of the departing general partner
    for a cash payment equal to its fair market value. In each case,
    this fair market value will be determined by agreement between
    the departing general partner and the successor general partner.
    If no agreement is reached, an independent investment banking
    firm or other independent expert selected by the departing
    general partner and the successor general partner will determine
    the fair market value. Or, if the departing general partner and
    the successor general partner cannot agree upon an expert, then
    an expert chosen by agreement of the experts selected by each of
    them will determine the fair market value.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the option described above is not exercised by either the
    departing general partner or the successor general partner, the
    departing general partner&#146;s general partner interest will
    automatically convert into units equal to the fair market value
    of those interests as determined by an investment banking firm
    or other independent expert selected in the manner described in
    the preceding paragraph.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, we will be required to reimburse the departing
    general partner for all amounts due the departing general
    partner, including, without limitation, all employee-related
    liabilities, including severance liabilities, incurred for the
    termination of any employees employed by the departing general
    partner or its affiliates for our benefit.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transfer
    of General Partner Interest</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except for transfer by our general partner of all, but not less
    than all, of its general partner interest in us to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an affiliate of the general partner (other than an
    individual);&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    another entity as part of the merger or consolidation of the
    general partner with or into another entity or the transfer by
    the general partner of all or substantially all of its assets to
    another entity,
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    our general partner may not transfer all or any part of its
    general partner interest in us to another entity prior to
    obtaining the approval of a majority of the units outstanding,
    excluding units held by our general partner and its affiliates.
    As a condition of this transfer, the transferee must assume the
    rights and duties of our general partner, agree to be bound by
    the provisions of the partnership agreement, and furnish an
    opinion of counsel regarding limited liability and tax matters.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner and it affiliates may at any time transfer
    units to one or more persons without unitholder approval.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transfer
    of Ownership Interests in Our General Partner</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At any time, Kelcy L. Warren, Enterprise GP Holdings L.P. and
    Natural Gas Partners VI, L.P., as the members of our general
    partner, may sell or transfer all or part of their ownership
    interest in the general partner without the approval of our
    unitholders.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    52
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Change of
    Management Provisions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement contains specific provisions that are
    intended to discourage a person or group from attempting to
    remove our general partner as general partner or otherwise
    change management. If any person or group other than our general
    partner and its affiliates acquires beneficial ownership of 20%
    or more of any class of units, that person or group loses voting
    rights on all of its units. This loss of voting rights does not
    apply to any person or group that acquires the units from our
    general partner or its affiliates and any transferees of that
    person or group approved by our general partner.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Limited
    Call Right</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If at any time our general partner and its affiliates hold more
    than 90% of the outstanding limited partner interests of any
    class, our general partner will have the right, but not the
    obligation, which it may assign in whole or in part to any of
    its affiliates or us, to acquire all, but not less than all, of
    the remaining limited partner interests of the class held by
    unaffiliated persons as of a record date to be selected by our
    general partner, on at least 10 but not more than
    60&#160;days&#146; notice. The purchase price in the event of
    this purchase is the greater of:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the highest cash price paid by either our general partner or any
    of its affiliates for any limited partners interests of the
    class purchased within the 90&#160;days preceding the date our
    general partner first mails notice of its election to purchase
    the limited partner interests;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the current market price of the limited partner interests of the
    class as of the date three days prior to the date that notice is
    mailed.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result of our general partner&#146;s right to purchase
    outstanding limited partner interests, a holder of limited
    partner interests may have his limited partner interests
    purchased at an undesirable time or price. The tax consequences
    to a unitholder of the exercise of this call right are the same
    as a sale by that unitholder of his units in the market. Please
    read &#147;Material Tax
    Consequences&#160;&#151;&#160;Disposition of Units.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Affiliates of our general partner, excluding Enterprise GP
    Holdings L.P., own approximately 83.6&#160;million of our common
    units, representing approximately 37.4% of our outstanding
    common units. Enterprise GP Holdings L.P. owns approximately
    39.0&#160;million of our common units, representing
    approximately 17.4% of our outstanding common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Non-Taxpaying
    Assignees; Redemption</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event we acquire an interstate pipeline that is subject
    to rate regulation of the Federal Energy Regulatory Commission,
    or FERC, our general partner will have the right under our
    partnership agreement to institute procedures, by giving notice
    to each of our unitholders, that would require transferees of
    common units and, upon the request of our general partner,
    existing holders of our common units to certify that they are
    Eligible Holders. The purpose of these certification procedures
    would be to enable us to utilize a federal income tax expense as
    a component of the pipeline&#146;s rate base upon which tariffs
    may be established under FERC rate making policies applicable to
    entities that pass-through their taxable income to their owners.
    Eligible Holders are individuals or entities subject to United
    States federal income taxation on the income generated by us or
    entities not subject to United States federal income taxation on
    the income generated by us, so long as all of the entity&#146;s
    owners are subject to such taxation. If these tax certification
    procedures are implemented, transferees of common units will be
    required to fill out a properly completed transfer application
    certifying, and our general partner, acting on our behalf, may
    at any time require each unitholder to re-certify;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    that the transferee or unitholder is an individual or an entity
    subject to United States federal income taxation on the income
    generated by us;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    that, if the transferee unitholder is an entity not subject to
    United States federal income taxation on the income generated by
    us, as in the case, for example, of a mutual fund taxed as a
    regulated investment company or a partnership, all the
    entity&#146;s owners are subject to United States federal income
    taxation on the income generated by us.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    53
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This certification can be changed in any manner our general
    partner determines is necessary or appropriate to implement its
    original purpose.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If, following institution of the certification procedures by our
    general partner, unitholders owning 10% or more of our
    outstanding common units, in the aggregate:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fail to furnish a transfer application containing the required
    certification;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fail to furnish a re-certification containing the required
    certification within 30&#160;days after request;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    is unable to provide a certification to the effect set forth in
    one of the two bullet points in the second preceding paragraph;
    then
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    we will have the right, which we may assign to any of our
    affiliates, to acquire all but not less than all of the units
    held by any such unitholder by giving written notice of
    redemption to such unitholder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The purchase price in the event of such an acquisition for each
    unit held by such unitholder will be equal to the current market
    price as of the date of redemption.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The purchase price will be paid in cash or by delivery of a
    promissory note, as determined by our general partner. Any such
    promissory note will bear interest at the rate of 5% annually
    and be payable in three equal annual installments of principal
    and accrued interest, commencing one year after the redemption
    date.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Meetings;
    Voting</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as described below regarding a person or group owning 20%
    or more of units then outstanding, unitholders on the record
    date will be entitled to notice of, and to vote at, meetings of
    our limited partners and to act upon matters for which approvals
    may be solicited. Units that are owned by non-citizen assignees
    will be voted by our general partner and our general partner
    will distribute the votes on those units in the same ratios as
    the votes of limited partners on other units are cast.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner does not anticipate that any meeting of
    unitholders will be called in the foreseeable future. Any action
    that is required or permitted to be taken by our unitholders may
    be taken either at a meeting of the unitholders or without a
    meeting if consents in writing describing the action so taken
    are signed by holders of the number of units as would be
    necessary to authorize or take that action at a meeting.
    Meetings of the unitholders may be called by our general partner
    or by unitholders owning at least 20% of the outstanding units.
    Unitholders may vote either in person or by proxy at meetings.
    The holders of a majority of the outstanding units, represented
    in person or by proxy, will constitute a quorum unless any
    action by the unitholders requires approval by holders of a
    greater percentage of the units, in which case the quorum will
    be the greater percentage.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each record holder of a unit has a vote according to his
    percentage interest in us, although additional limited partner
    interests having special voting rights could be issued. Please
    read &#147;&#151;&#160;Issuance of Additional Securities&#148;
    above. However, if at any time any person or group, other than
    our general partner and its affiliates, or a direct or
    subsequently approved transferee of our general partner or its
    affiliates, acquires, in the aggregate, beneficial ownership of
    20% or more of any class of units then outstanding, that person
    or group will lose voting rights on all of its units and the
    units may not be voted on any matter and will not be considered
    to be outstanding when sending notices of a meeting of
    unitholders, calculating required votes, determining the
    presence of a quorum or for other similar purposes. Units held
    in nominee or street name account will be voted by the broker or
    other nominee in accordance with the instruction of the
    beneficial owner unless the arrangement between the beneficial
    owner and his nominee provides otherwise.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any notice, demand, request, report or proxy material required
    or permitted to be given or made to record holders of units
    under our partnership agreement will be delivered to the record
    holder by us or by the transfer agent.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    54
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Status as
    Limited Partner</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    By transfer of units in accordance with our partnership
    agreement, each transferee of units shall be admitted as a
    limited partner with respect to the transferred units when such
    transfer and admission is reflected in our books and records.
    Except as described under &#147;&#151;&#160;Limited
    Liability,&#148; the units will be fully paid, and unitholders
    will not be required to make additional contributions.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Non-Citizen
    Assignees; Redemption</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we are or become subject to federal, state or local laws or
    regulations that, in the reasonable determination of our general
    partner, create a substantial risk of cancellation or forfeiture
    of any property that we have an interest in because of the
    nationality, citizenship or other related status of any limited
    partner, we may redeem the units held by the limited partner at
    their current market price. In order to avoid any cancellation
    or forfeiture, our general partner may require each limited
    partner to furnish information about his nationality,
    citizenship or related status. If a limited partner fails to
    furnish information about his nationality, citizenship or other
    related status within 30&#160;days after a request for the
    information or our general partner determines after receipt of
    the information that the limited partner is not an eligible
    citizen, the limited partner may be treated as a non-citizen
    assignee. A non-citizen assignee is entitled to an interest
    equivalent to that of a limited partner for the right to share
    in allocations and distributions from us, including liquidating
    distributions. A non-citizen assignee does not have the right to
    direct the voting of his units and may not receive distributions
    in kind upon our liquidation.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Indemnification</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under our partnership agreement, in most circumstances, we will
    indemnify the following persons, to the fullest extent permitted
    by law, from and against all losses, claims, damages or similar
    events:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;our general partner;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;any departing general partner;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;any person who is or was an affiliate of our general
    partner or any departing general partner;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (4)&#160;any person who is or was an officer, director, member,
    partner, fiduciary or trustee of any entity described in (1),
    (2)&#160;or (3)&#160;above;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (5)&#160;any person who is or was serving as an officer,
    director, member, partner, fiduciary or trustee of another
    person at the request of the general partner or any departing
    general partner;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (6)&#160;any person designated by our general partner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any indemnification under these provisions will only be out of
    our assets. Unless it otherwise agrees, our general partner will
    not be personally liable for, or have any obligation to
    contribute or loan funds or assets to us to enable us to
    effectuate, indemnification. We may purchase insurance against
    liabilities asserted against and expenses incurred by persons
    for our activities, regardless of whether we would have the
    power to indemnify the person against liabilities under the
    partnership agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Reimbursement
    of Expenses and Administrative Fee</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner receives a management fee of $500,000 for
    its management of us. Under the terms of the shared services
    agreement, we pay ETP an annual administrative fee of $500,000
    and reimburse ETP at cost for all services to us for the
    provision of various general and administrative services for our
    benefit.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement requires us to reimburse our general
    partner for all direct and indirect expenses it incurs or
    payments it makes on our behalf and all other expenses allocable
    to us or otherwise incurred by our general partner in connection
    with operating our business. These expenses include salary,
    bonus, incentive compensation and other amounts paid to persons
    who perform services for us or on our behalf and expenses
    allocated to our general partner by its affiliates. The general
    partner is entitled to determine in good faith the expenses that
    are allocable to us.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    55
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Books and
    Reports</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner is required to keep appropriate books of our
    business at our principal offices. The books will be maintained
    for both tax and financial reporting purposes on an accrual
    basis. For tax and fiscal reporting purposes, our fiscal year is
    the calendar year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will furnish or make available to record holders of units,
    within 120&#160;days after the close of each fiscal year, an
    annual report containing audited financial statements and a
    report on those financial statements by our independent public
    accountants. Except for our fourth quarter, we will also furnish
    or make available summary financial information within
    90&#160;days after the close of each quarter.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will furnish each record holder of a unit with information
    reasonably required for tax reporting purposes within
    90&#160;days after the close of each calendar year. This
    information is expected to be furnished in summary form so that
    some complex calculations normally required of partners can be
    avoided. Our ability to furnish this summary information to
    unitholders will depend on the cooperation of unitholders in
    supplying us with specific information. Every unitholder will
    receive information to assist him in determining his federal and
    state tax liability and filing his federal and state income tax
    returns, regardless of whether he supplies us with information.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Right to
    Inspect Our Books and Records</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A limited partner can, for a purpose reasonably related to the
    limited partner&#146;s interest as a limited partner, upon
    reasonable demand stating the purpose of such demand and at his
    own expense, obtain:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a current list of the name and last known address of each
    partner;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a copy of our tax returns;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    information as to the amount of cash and a description and
    statement of the agreed value of any other property or services,
    contributed or to be contributed by each partner and the date on
    which each became a partner;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    copies of our partnership agreement, our certificate of limited
    partnership, amendments to either of them and powers of attorney
    which have been executed under our partnership agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    information regarding the status of our business and financial
    condition;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any other information regarding our affairs as is just and
    reasonable.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner may, and intends to, keep confidential from
    the limited partners trade secrets and other information the
    disclosure of which our general partner believes in good faith
    is not in our best interest or which we are required by law or
    by agreements with third parties to keep confidential.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Registration
    Rights</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under our partnership agreement, we have agreed to register for
    resale under the Securities Act and applicable state securities
    laws any units or other partnership securities proposed to be
    sold by our general partner or any of its affiliates or their
    assignees if an exemption from the registration requirements is
    not otherwise available. We are obligated to pay all expenses
    incidental to the registration, excluding underwriting discounts
    and commissions.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    56
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "MATERIAL PROVISIONS OF ETP&#146;S PARTNERSHIP AGREEMENT" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='128'></A><B><FONT style="font-family: 'Times New Roman', Times">MATERIAL
    PROVISIONS OF<BR>
    ETP&#146;S PARTNERSHIP AGREEMENT</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a summary of material provisions of ETP&#146;s
    partnership agreement. For more information on distributions of
    ETP&#146;s available cash, please read &#147;ETP&#146;s Cash
    Distribution Policy.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Voting
    Rights</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP unitholders do not have voting rights except with respect to
    the following matters, for which ETP&#146;s partnership
    agreement requires the approval of the holders of a majority of
    the units, unless otherwise indicated:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a merger of ETP;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a sale or exchange of all or substantially all of the assets of
    ETP;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    dissolution or reconstitution of ETP upon dissolution;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    certain amendments to ETP&#146;s partnership agreement;&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the transfer to another person of ETP&#146;s incentive
    distribution rights at any time, except for transfers to
    affiliates of the general partner or transfers in connection
    with the general partner&#146;s merger or consolidation with or
    into, or sale of all or substantially all of its assets to,
    another person.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The removal of ETP&#146;s general partner requires the approval
    of not less than
    66<FONT style="vertical-align: top; font-size: 70&#37;">2</FONT>/<FONT style="font-size: 70&#37;">3</FONT>%
    of all outstanding units, including units held by its general
    partner and its affiliates. Any removal is subject to the
    election of a successor general partner by the holders of a
    majority of the outstanding common units, including units held
    by ETP&#146;s general partner and its affiliates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Issuance
    of Additional Securities</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s partnership agreement authorizes it to issue an
    unlimited number of additional partnership securities and rights
    to buy partnership securities for the consideration and on the
    terms and conditions established by its general partner in its
    general partners&#146; sole discretion, without the approval of
    the unitholders. Any such additional partnership securities may
    be senior to the common units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is possible that ETP will fund acquisitions through the
    issuance of additional common units or other equity securities.
    Holders of any additional common units ETP issues will be
    entitled to share equally with the then-existing holders of its
    common units in its distributions of available cash. In
    addition, the issuance of additional partnership interests may
    dilute the value of the interests of the then-existing holders
    of common units in ETP&#146;s net assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In accordance with Delaware law and the provisions of its
    partnership agreement, ETP may also issue additional partnership
    securities that, in the sole discretion of the general partner,
    may have special voting rights to which common units are not
    entitled.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon issuance of additional partnership securities, ETP&#146;s
    general partner will be required to make additional capital
    contributions to the extent necessary to maintain its 2.0%
    general partner interest in ETP. Moreover, ETP&#146;s general
    partner will have the right, which it may from time to time
    assign in whole or in part to any of its affiliates, to purchase
    ETP&#146;s common units or other equity securities whenever, and
    on the same terms that, ETP issues those securities to persons
    other than its general partner and its affiliates, to the extent
    necessary to maintain its percentage interest, including its
    interest represented by ETP&#146;s common units, that existed
    immediately prior to each issuance. The holders of ETP&#146;s
    common units will not have preemptive rights to acquire
    additional common units or other partnership securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following matters require the approval of the majority of
    the outstanding common units, including the common units owned
    by the general partner and its affiliates:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a merger of our partnership;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a sale or exchange of all or substantially all of our assets;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    57
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    dissolution or reconstitution of our partnership upon
    dissolution;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    certain amendments to the partnership agreement;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the transfer to another person of our incentive distribution
    rights at any time, except for transfers to affiliates of the
    general partner or transfers in connection with the general
    partner&#146;s merger or consolidation with or into, or sale of
    all or substantially all of its assets to, another person.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The removal of our general partner requires the approval of not
    less than
    66<FONT style="vertical-align: top; font-size: 70&#37;">2</FONT>/<FONT style="font-size: 70&#37;">3</FONT>%
    of all outstanding units, including units held by our general
    partner and its affiliates. Any removal is subject to the
    election of a successor general partner by the holders of a
    majority of the outstanding common units, including units held
    by our general partner and its affiliates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ETP
    Units</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Common Units.</I>&#160;&#160;As of June&#160;30, 2007, ETP
    had approximately 137.0&#160;million common units outstanding,
    of which approximately 74.5&#160;million were held by the public
    and approximately 62.5&#160;million were held by ETE or its
    affiliates. As of such date, the common units represent an
    aggregate 98.0% limited partner interest in ETP. ETP&#146;s
    general partner owns an aggregate 2.0% general partner interest
    in ETP. ETP&#146;s common units are registered under the
    Securities Exchange Act of 1934, as amended and are listed for
    trading on the NYSE. The common units are entitled to
    distributions of Available Cash as described in &#147;ETP&#146;s
    Cash Distribution Policy.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Class&#160;E Units.</I>&#160;&#160;8,853,832 class&#160;E
    units, all of which are held by our former general partner,
    Heritage Holdings. Heritage Holdings became our wholly-owned
    subsidiary in conjunction with the January 2004 Energy Transfer
    transactions. Class&#160;E units were converted from common
    units held by Heritage Holdings at that time. Class&#160;E units
    generally do not have voting rights; are entitled to aggregate
    distributions equal to a percentage of the total amount of cash
    distributed to all unitholders, up to a maximum of
    $1.41&#160;per class&#160;E unit per year; and will be allocated
    1% of any gain and an equivalent amount of any loss allocated to
    the common units in the event of a termination or liquidation of
    ETP. Because the owner of the class&#160;E units is our
    wholly-owned subsidiary, they are treated as treasury stock.
    Although distributions on the class&#160;E units will be
    available to us as the owner of Heritage Holdings, this amount
    will be reduced by the annual tax payments at corporate federal
    income tax rates that Heritage Holdings is required to pay with
    respect to distributions on the class&#160;E units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Amendments
    to ETP&#146;s Partnership Agreement</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Amendments to ETP&#146;s partnership agreement may be proposed
    only by ETP&#146;s general partner. Certain amendments require
    the approval of a majority of the outstanding common units,
    including common units owned by the general partner and its
    affiliates. Any amendment that materially and adversely affects
    the rights or preferences of any class of partnership interests
    in relation to other classes of partnership interests will
    require the approval of at least a majority of the class of
    limited partnership interests so affected. However, in some
    circumstances, more particularly described in ETP&#146;s
    partnership agreement, ETP&#146;s general partner may make
    amendments to ETP&#146;s partnership agreement without the
    approval of ETP&#146;s unitholders to reflect:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a change in ETP&#146;s name, the location of its principal place
    of business, its registered agent or its registered office;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the admission, substitution, withdrawal or removal of partners;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a change to qualify or continue ETP&#146;s qualification as a
    limited partnership or a partnership in which its limited
    partners have limited liability under the laws of any state or
    to ensure that neither ETP or HOLP will be treated as an
    association taxable as a corporation or otherwise taxed as an
    entity for federal income tax purposes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a change that does not adversely affect ETP&#146;s unitholders
    in any material respect;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    58
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a change to (i)&#160;satisfy any requirements, conditions or
    guidelines contained in any opinion, directive, order, ruling or
    regulation of any federal or state agency or judicial authority
    or contained in any federal or state statute,
    (ii)&#160;facilitate the trading of ETP&#146;s common units or
    comply with any rule, regulation, guideline or requirement of
    any national securities exchange on which its common units are
    or will be listed for trading, (iii)&#160;that is necessary or
    advisable in connection with action taken by ETP&#146;s general
    partner with respect to subdivision and combination of its
    securities or (iv)&#160;that is required to effect the intent
    expressed in ETP&#146;s partnership agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a change in ETP&#146;s fiscal year or taxable year and any
    changes that are necessary or advisable as a result of a change
    in its fiscal year or taxable year;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an amendment that is necessary to prevent ETP, or its general
    partner or its general partner&#146;s directors, officers,
    trustees or agents from being subjected to the provisions of the
    Investment Company Act of 1940, as amended, the Investment
    Advisers Act of 1940, as amended, or &#147;plan asset&#148;
    regulations adopted under the Employee Retirement Income
    Security Act of 1974, as amended;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an amendment that is necessary or advisable in connection with
    the authorization or issuance of any class or series of
    ETP&#146;s securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any amendment expressly permitted in ETP&#146;s partnership
    agreement to be made by its general partner acting alone;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an amendment effected, necessitated or contemplated by a merger
    agreement approved in accordance with its partnership agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an amendment that is necessary or advisable to reflect, account
    for and deal with appropriately ETP&#146;s formation of, or
    investment in, any corporation, partnership, joint venture,
    limited liability company or other entity other than its
    operating partnership, in connection with its conduct of
    activities permitted by its partnership agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a merger or conveyance to effect a change in ETP&#146;s legal
    form;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any other amendments substantially similar to the foregoing.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Merger,
    Sale or Other Disposition of Assets</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s general partner is generally prohibited, without the
    prior approval of the holders of at least a majority of the
    outstanding common units (excluding common units held by the
    general partner and its affiliates), from causing ETP to, among
    other things, sell, exchange or otherwise dispose of all or
    substantially all of its assets in a single transaction or a
    series of related transactions or approving on behalf of ETP the
    sale, exchange or other disposition of all or substantially all
    of the assets of its operating partnership; provided that its
    general partner may mortgage, pledge, hypothecate or grant a
    security interest in all or substantially all of the assets of
    ETP or its operating partnership without such approval.
    ETP&#146;s general partner may also sell all or substantially
    all of ETP&#146;s assets or its operating partnership&#146;s
    assets pursuant to a foreclosure or other realization upon the
    foregoing encumbrances without such approval. Furthermore,
    provided that certain conditions are satisfied, the ETP&#146;s
    general partner may merge ETP or any member of its partnership
    group into, or convey some or all of the partnership
    group&#146;s assets to, a newly-formed entity if the sole
    purpose of such merger or conveyance is to effect a mere change
    in the legal form of ETP into another limited liability entity.
    ETP&#146;s unitholders are not entitled to dissenters&#146;
    rights of appraisal under the partnership agreement or
    applicable Delaware law in the event of a merger or
    consolidation of ETP, a sale of substantially all of ETP&#146;s
    assets or any other transaction or event.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    59
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Termination
    or Dissolution</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP will continue as a limited partnership until terminated
    under its partnership agreement. ETP will dissolve upon:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;the expiration of ETP&#146;s term under its partnership
    agreement;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;the election of ETP&#146;s general partner to dissolve
    ETP, if approved by the holders of a majority of ETP&#146;s
    outstanding common units, excluding those common units held by
    ETP&#146;s general partner and its affiliates;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;the sale, exchange or other disposition of all or
    substantially all of ETP assets and properties and those of its
    subsidiaries;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (4)&#160;the entry of a decree of judicial dissolution of
    ETP;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (5)&#160;the withdrawal or removal of ETP&#146;s general partner
    or any other event that results in its ceasing to be ETP&#146;s
    general partner other than by reason of a transfer of its
    general partner interest in accordance with ETP&#146;s
    partnership agreement or withdrawal or removal following
    approval and admission of a successor.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon a dissolution under clause&#160;(5) above, the holders of a
    majority of ETP&#146;s common outstanding units (excluding those
    common units held by ETP&#146;s general partner and its
    affiliates) may also elect, within specific time limitations, to
    reconstitute ETP and continue its business on the same terms and
    conditions described in its partnership agreement by forming a
    new limited partnership on terms identical to those in
    ETP&#146;s partnership agreement and having as general partner
    an entity approved by the holders of a majority of ETP&#146;s
    outstanding common units, excluding those common units held by
    ETP&#146;s general partner and its affiliates, subject to
    receipt by ETP of an opinion of counsel to the effect that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the action would not result in the loss of limited liability of
    any limited partner;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    none of the partnership, the reconstituted limited partnership,
    ETP&#146;s operating partnership nor any of its other
    subsidiaries would be treated as an association taxable as a
    corporation or otherwise be taxable as an entity for federal
    income tax purposes upon the exercise of that right to continue.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Liquidation
    and Distribution of Proceeds</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon ETP&#146;s dissolution, unless it is reconstituted and
    continued as a new limited partnership, the person authorized to
    wind up ETP&#146;s affairs (the liquidator) will, acting with
    all the powers of ETP&#146;s general partner that the liquidator
    deems necessary or desirable in its good faith judgment,
    liquidate ETP&#146;s assets. The proceeds of the liquidation
    will be applied as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>first</I>, towards the payment of all of ETP&#146;s creditors
    and the creation of a reserve for contingent
    liabilities;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>then</I>, to all partners in accordance with the positive
    balance in the respective capital accounts.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under some circumstances and subject to some limitations, the
    liquidator may defer liquidation or distribution of ETP&#146;s
    assets for a reasonable period of time. If the liquidator
    determines that a sale would be impractical or would cause a
    loss to ETP&#146;s partners, ETP&#146;s general partner may
    distribute assets in kind to ETP&#146;s partners.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Withdrawal
    or Removal of ETP&#146;s General Partner</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s general partner may withdraw as general partner
    without first obtaining approval of any unitholder by giving
    90&#160;days&#146; written notice, and that withdrawal will not
    constitute a violation of ETP&#146;s partnership agreement. In
    addition, ETP&#146;s general partner may withdraw without
    unitholder approval upon 90&#160;days&#146; notice to ETP&#146;s
    limited partners if at least 50% of ETP&#146;s outstanding
    common units are held or controlled by one person and its
    affiliates other than its general partner and its affiliates.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    60
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon the voluntary withdrawal of ETP&#146;s general partner, the
    holders of a majority of ETP&#146;s outstanding common units,
    excluding the common units held by the withdrawing general
    partner and its affiliates, may elect a successor to the
    withdrawing general partner. If a successor is not elected, or
    is elected but an opinion of counsel regarding limited liability
    and tax matters cannot be obtained, ETP will be dissolved, wound
    up and liquidated, unless within 90&#160;days after that
    withdrawal, the holders of a majority of its outstanding units,
    excluding the common units held by the withdrawing general
    partner and its affiliates, agree to continue ETP&#146;s
    business and to appoint a successor general partner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s general partner may not be removed unless that
    removal is approved by the vote of the holders of not less than
    two-thirds of ETP&#146;s outstanding units, including units held
    by its general partner and its affiliates, and ETP receives an
    opinion of counsel regarding limited liability and tax matters.
    In addition, if ETP&#146;s general partner is removed as
    ETP&#146;s general partner under circumstances where cause does
    not exist, ETP&#146;s general partner will have the right to
    receive cash in exchange for its partnership interest as a
    general partner in ETP, its partnership interest as the general
    partner of any member of the Energy Transfer partnership group
    and its incentive distribution rights. Cause is narrowly defined
    to mean that a court of competent jurisdiction has entered a
    final, non-appealable judgment finding the general partner
    liable for actual fraud, gross negligence or willful or wanton
    misconduct in its capacity as ETP&#146;s general partner. Any
    removal of this kind is also subject to the approval of a
    successor general partner by the vote of the holders of a
    majority of ETP&#146;s outstanding common units, including those
    held by its general partner and its affiliates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    While ETP&#146;s partnership agreement limits the ability of
    ETP&#146;s general partner to withdraw, it allows the general
    partner interest to be transferred to an affiliate or to a third
    party in conjunction with a merger or sale of all or
    substantially all of the assets of ETP&#146;s general partner.
    In addition, ETP&#146;s partnership agreement expressly permits
    the sale, in whole or in part, of the ownership of ETP&#146;s
    general partner. ETP&#146;s general partner may also transfer,
    in whole or in part, the common units it owns.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transfer
    of General Partner Interests</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s general partner may transfer all or any part of its
    general partner interest in ETP or its operating partnership to
    another person without the approval of the holders of
    outstanding common units; provided that, in each case, such
    transferee assumes the rights and duties of the general partner
    to whose interest such transferee has succeeded, agrees to be
    bound by the provisions of the partnership agreement, furnishes
    an opinion of counsel regarding limited liability and tax
    matters and agrees to acquire all (or the appropriate portion
    thereof, as applicable) of the general partner&#146;s interest
    in each other member of ETP&#146;s partnership group and agrees
    to be bound by the provisions of the operating
    partnership&#146;s partnership agreement. The members of the
    general partner may also sell or transfer all or part of their
    interest in the general partner to an affiliate or a third party
    without the approval of the unitholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Change of
    Management Provisions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s partnership agreement contains the following specific
    provisions that are intended to discourage a person or group
    from attempting to remove ETP&#146;s general partner or
    otherwise change management:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any units held by a person that owns 20% or more of any class of
    ETP&#146;s units then outstanding, other than its general
    partner and its affiliates, cannot be voted on any
    matter;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the partnership agreement contains provisions limiting the
    ability of unitholders to call meetings or to acquire
    information about ETP&#146;s operations, as well as other
    provisions limiting the unitholders&#146; ability to influence
    the manner or direction of management.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Limited
    Call Right</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If at any time less than 20% of the outstanding common units of
    any class are held by persons other than ETP&#146;s general
    partner and its affiliates, its general partner will have the
    right to acquire all, but not less than all, of those common
    units at a price no less than their then-current market price.
    As a consequence, a
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    unitholder may be required to sell his common units at an
    undesirable time or price. ETP&#146;s general partner may assign
    this purchase right to any of its affiliates or ETP.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Reimbursement
    of Expenses</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ETP&#146;s partnership agreement requires it to reimburse its
    general partner for all direct and indirect expenses it incurs
    or payments it makes on ETP&#146;s behalf and all other expenses
    allocable to ETP or otherwise reasonably incurred by its general
    partner in connection with operating ETP&#146;s business. These
    expenses include salary, bonus, incentive compensation and other
    amounts paid to persons who perform services for ETP or for its
    general partner in the discharge of its duties to ETP.
    ETP&#146;s general partner is entitled to determine the expenses
    that are allocable to ETP in any reasonable manner in its sole
    discretion.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Indemnification</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under its partnership agreement, in most circumstances, ETP will
    indemnify ETP&#146;s general partner, its general partner&#146;s
    affiliates and their officers and directors to the fullest
    extent permitted by law, from and against all losses, claims or
    damages any of them may suffer by reason of their status as
    general partner, officer or director, as long as the person
    seeking indemnity acted in good faith and in a manner believed
    to be in or not opposed to ETP&#146;s best interest. Any
    indemnification under these provisions will only be out of
    ETP&#146;s assets. ETP&#146;s general partner shall not be
    personally liable for, or have any obligation to contribute or
    loan funds or assets to ETP to enable ETP to effectuate any
    indemnification. ETP is authorized to purchase insurance against
    liabilities asserted against and expenses incurred by persons
    for its activities, regardless of whether it would have the
    power to indemnify the person against liabilities under its
    partnership agreement.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Registration
    Rights</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under its partnership agreement, ETP has agreed to register for
    resale under the Securities Act and applicable state securities
    laws any common units or other partnership securities proposed
    to be sold by its general partner or any of its affiliates or
    their assignees if an exemption from the registration
    requirements is not otherwise available. ETP is obligated to pay
    all expenses incidental to the registration, excluding
    underwriting discounts and commissions.
</DIV>

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<!-- link1 "MATERIAL TAX CONSEQUENCES" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='129'></A><B><FONT style="font-family: 'Times New Roman', Times">MATERIAL
    TAX CONSEQUENCES</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This section is a discussion of the material tax considerations
    that may be relevant to prospective unitholders who are
    individual citizens or residents of the United States and,
    unless otherwise noted in the following discussion, is the
    opinion of Vinson&#160;&#038; Elkins L.L.P., tax counsel to the
    general partner and us, insofar as it relates to legal
    conclusions with respect to matters of United States federal
    income tax law. This section is based upon current provisions of
    the Internal Revenue Code, existing and proposed regulations and
    current administrative rulings and court decisions, all of which
    are subject to change. Later changes in these authorities may
    cause the tax consequences to vary substantially from the
    consequences described below. Unless the context otherwise
    requires, references in this section to &#147;us&#148; or
    &#147;we&#148; are references to Energy Transfer Equity, L.P.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following discussion does not comment on all federal income
    tax matters affecting us or the unitholders. Moreover, the
    discussion focuses on unitholders who are individual citizens or
    residents of the United States and has only limited application
    to corporations, estates, trusts, nonresident aliens or other
    unitholders subject to specialized tax treatment, such as
    tax-exempt institutions, foreign persons, individual retirement
    accounts (IRAs), real estate investment trusts (REITs) or mutual
    funds. Accordingly, we urge each prospective unitholder to
    consult, and depend on, his own tax advisor in analyzing the
    federal, state, local and foreign tax consequences particular to
    him of the ownership or disposition of units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All statements as to matters of law and legal conclusions, but
    not as to factual matters, contained in this section, unless
    otherwise noted, are the opinion of Vinson&#160;&#038; Elkins
    L.L.P. and are based on the accuracy of the representations made
    by us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No ruling has been or will be requested from the IRS regarding
    any matter affecting us or prospective unitholders. Instead, we
    will rely on opinions of Vinson&#160;&#038; Elkins L.L.P. Unlike
    a ruling, an opinion of counsel represents only that
    counsel&#146;s best legal judgment and does not bind the IRS or
    the courts. Accordingly, the opinions and statements made herein
    may not be sustained by a court if contested by the IRS. Any
    contest of this sort with the IRS may materially and adversely
    impact the market for the units and the prices at which units
    trade. In addition, the costs of any contest with the IRS,
    principally legal, accounting and related fees, will result in a
    reduction in cash available for distribution to our unitholders
    and our general partner and thus will be borne indirectly by our
    unitholders and our general partner. Furthermore, the tax
    treatment of us, or of an investment in us, may be significantly
    modified by future legislative or administrative changes or
    court decisions. Any modifications may or may not be
    retroactively applied.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the reasons described below, Vinson&#160;&#038; Elkins
    L.L.P. has not rendered an opinion with respect to the following
    specific federal income tax issues: (1)&#160;the treatment of a
    unitholder whose units are loaned to a short seller to cover a
    short sale of units (please read &#147;&#151;&#160;Tax
    Consequences of Unit Ownership&#160;&#151; Treatment of Short
    Sales&#148;); (2)&#160;whether our monthly convention for
    allocating taxable income and losses is permitted by existing
    Treasury Regulations (please read &#147;&#151;&#160;Disposition
    of Units&#160;&#151; Allocations Between Transferors and
    Transferees&#148;); and (3)&#160;whether our method for
    depreciating Section&#160;743 adjustments is sustainable in
    certain cases (please read &#147;&#151;&#160;Tax Consequences of
    Unit Ownership&#160;&#151; Section&#160;754 Election&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Partnership
    Status</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A partnership is not a taxable entity and incurs no federal
    income tax liability. Instead, each partner of a partnership is
    required to take into account his share of items of income,
    gain, loss and deduction of the partnership in computing his
    federal income tax liability, regardless of whether cash
    distributions are made to him by the partnership. Distributions
    by a partnership to a partner are generally not taxable unless
    the amount of cash distributed is in excess of the
    partner&#146;s adjusted basis in his partnership interest.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;7704 of the Internal Revenue Code provides that
    publicly traded partnerships will, as a general rule, be taxed
    as corporations. However, an exception, referred to as the
    &#147;Qualifying Income Exception,&#148; exists with respect to
    publicly traded partnerships of which 90% or more of the gross
    income for every taxable year consists of &#147;qualifying
    income.&#148; Qualifying income includes income and gains
    derived from the transportation, storage and processing of crude
    oil, natural gas and products thereof, the retail and wholesale
    marketing of propane, the transportation of propane and natural
    gas liquids, certain related hedging activities, and our
    allocable share of income ETP&#146;s income from these sources.
    Other types of qualifying income include interest
</DIV>

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    63
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (other than from a financial business), dividends, gains from
    the sale of real property and gains from the sale or other
    disposition of capital assets held for the production of income
    that otherwise constitutes qualifying income. We estimate that
    less than 6% of our current gross income is not qualifying
    income; however, this estimate could change from time to time.
    Based upon and subject to this estimate, the factual
    representations made by us and our general partner and a review
    of the applicable legal authorities, Vinson&#160;&#038; Elkins
    L.L.P. is of the opinion that at least 90% of our current gross
    income constitutes qualifying income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No ruling has been or will be sought from the IRS and the IRS
    has made no determination as to our status for federal income
    tax purposes or whether our operations generate &#147;qualifying
    income&#148; under Section&#160;7704 of the Internal Revenue
    Code. Moreover, no ruling has been or will be sought from the
    IRS and the IRS has made no determination as to ETP&#146;s
    status for federal income tax purposes or whether its operations
    generate &#147;qualifying income&#148; under Section&#160;7704
    of the Internal Revenue Code. Instead, we will rely on the
    opinion of Vinson&#160;&#038; Elkins L.L.P. on such matters. It
    is the opinion of Vinson&#160;&#038; Elkins L.L.P. that, based
    upon the Internal Revenue Code, its regulations, published
    revenue rulings and court decisions and the representations
    described below, we will be classified as a partnership.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In rendering its opinion, Vinson&#160;&#038; Elkins L.L.P. has
    relied on factual representations made by us and our general
    partner. The representations made by us and our general partner
    upon which Vinson&#160;&#038; Elkins L.L.P. has relied are:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Neither we nor ETP has elected or will elect to be treated as a
    corporation;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    For each taxable year, more than 90% of our gross income has
    been and will be income that Vinson&#160;&#038; Elkins L.L.P.
    has opined or will opine is &#147;qualifying income&#148; within
    the meaning of Section&#160;7704(d) of the Internal Revenue Code.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we fail to meet the Qualifying Income Exception, other than a
    failure that is determined by the IRS to be inadvertent and that
    is cured within a reasonable time after discovery, in which
    case, the IRS may also require us to make adjustments with
    respect to our unitholders or pay other amounts, we will be
    treated as if we had transferred all of our assets, subject to
    liabilities, to a newly formed corporation, on the first day of
    the year in which we fail to meet the Qualifying Income
    Exception, in return for stock in that corporation, and then
    distributed that stock to the unitholders in liquidation of
    their interests in us. This deemed contribution and liquidation
    should be tax-free to unitholders and us so long as we, at that
    time, do not have liabilities in excess of the tax basis of our
    assets. Thereafter, we would be treated as a corporation for
    federal income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we were taxable as a corporation in any taxable year, either
    as a result of a failure to meet the Qualifying Income Exception
    or otherwise, our items of income, gain, loss and deduction
    would be reflected only on our tax return rather than being
    passed through to the unitholders, and our net income would be
    taxed to us at corporate rates. Moreover, if ETP were taxable as
    a corporation in any taxable year, our share of ETP&#146;s items
    of income, gain, loss and deduction would not be passed through
    to us and ETP would pay tax on its income at corporate rates. If
    we or ETP were taxable as corporations, losses recognized by ETP
    would not flow through to us or our losses would not flow
    through to our unitholders, as the case may be. In addition, any
    distribution made by us to a unitholder (or by ETP to us) would
    be treated as either taxable dividend income, to the extent of
    current or accumulated earnings and profits, or, in the absence
    of earnings and profits, a nontaxable return of capital, to the
    extent of the unitholder&#146;s tax basis in his units (or our
    tax basis in our interest in ETP), or taxable capital gain,
    after the unitholder&#146;s tax basis in his units (or our tax
    basis in our interest in ETP) is reduced to zero. Accordingly,
    taxation of either us or ETP as a corporation would result in a
    material reduction in a unitholder&#146;s cash flow and
    after-tax return and thus would likely result in a substantial
    reduction of the value of the units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The discussion below is based on Vinson&#160;&#038; Elkins
    L.L.P.&#146;s opinion that we and ETP will be classified as
    partnerships for federal income tax purposes.
</DIV>

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    <BR>
    64
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Limited
    Partner Status</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unitholders who have become limited partners of us will be
    treated as partners in us for federal income tax purposes. Also:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    assignees who have executed and delivered transfer applications,
    and are awaiting admission as limited partners;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    unitholders whose units are held in street name or by a nominee
    and who have the right to direct the nominee in the exercise of
    all substantive rights attendant to the ownership of their units
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    will be treated as partners for federal income tax purposes. As
    there is no direct or indirect controlling authority addressing
    assignees of units who are entitled to execute and deliver
    transfer applications and thereby become entitled to direct the
    exercise of attendant rights, but who fail to execute and
    deliver transfer applications, Vinson&#160;&#038; Elkins
    L.L.P.&#146;s opinion does not extend to these persons.
    Furthermore, a purchaser or other transferee of units who does
    not execute and deliver a transfer application may not receive
    some federal income tax information or reports furnished to
    record holders of units unless the units are held in a nominee
    or street name account and the nominee or broker has executed
    and delivered a transfer application for those units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A beneficial owner of units whose units have been transferred to
    a short seller to complete a short sale would appear to lose his
    status as a partner with respect to those units for federal
    income tax purposes. Please read &#147;&#151;&#160;Tax
    Consequences of Unit Ownership&#160;&#151; Treatment of Short
    Sales.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Income, gains, deductions or losses would not appear to be
    reportable by a unitholder who is not a partner for federal
    income tax purposes, and any cash distributions received by a
    unitholder who is not a partner for federal income tax purposes
    would therefore appear to be fully taxable as ordinary income.
    These holders are urged to consult their own tax advisors with
    respect to their status as partners in us for federal income tax
    purposes.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax
    Consequences of Unit Ownership</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Flow-Through of Taxable Income.</I>&#160;&#160;We will not
    pay any federal income tax. Instead, each unitholder will be
    required to report on his income tax return his share of our
    income, gains, losses and deductions without regard to whether
    corresponding cash distributions are received by him.
    Consequently, we may allocate income to a unitholder even if he
    has not received a cash distribution. Each unitholder will be
    required to include in income his allocable share of our income,
    gains, losses and deductions for our taxable year ending with or
    within his taxable year. Our taxable year ends on
    December&#160;31.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Treatment of Distributions.</I>&#160;&#160;Distributions by
    us to a unitholder generally will not be taxable to the
    unitholder for federal income tax purposes, except to the extent
    the amount of any such cash distribution exceeds his tax basis
    in his units immediately before the distribution. Our cash
    distributions in excess of a unitholder&#146;s tax basis
    generally will be considered to be gain from the sale or
    exchange of the units, taxable in accordance with the rules
    described under &#147;&#151;&#160;Disposition of Units&#148;
    below. Any reduction in a unitholder&#146;s share of our
    liabilities for which no partner, including the general partner,
    bears the economic risk of loss, known as &#147;nonrecourse
    liabilities,&#148; will be treated as a distribution of cash to
    that unitholder. To the extent our distributions cause a
    unitholder&#146;s &#147;at risk&#148; amount to be less than
    zero at the end of any taxable year, he must recapture any
    losses deducted in previous years. Please read
    &#147;&#151;&#160;Limitations on Deductibility of Losses.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A decrease in a unitholder&#146;s percentage interest in us
    because of our issuance of additional units will decrease his
    share of our nonrecourse liabilities, and thus will result in a
    corresponding deemed distribution of cash. A non-pro rata
    distribution of money or property may result in ordinary income
    to a unitholder, regardless of his tax basis in his units, if
    the distribution reduces the unitholder&#146;s share of our
    &#147;unrealized receivables,&#148; including depreciation
    recapture,
    <FONT style="white-space: nowrap">and/or</FONT>
    substantially appreciated &#147;inventory items,&#148; both as
    defined in the Internal Revenue Code, and collectively,
    &#147;Section&#160;751 Assets.&#148; To that extent, he will be
    treated as having been distributed his proportionate share of
    the Section&#160;751 Assets and having exchanged those assets
    with us in return for the non-pro rata portion of the actual
    distribution made to him. This latter deemed exchange will
    generally result in the unitholder&#146;s realization of
    ordinary income, which will equal the excess
</DIV>

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    <BR>
    65
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    of (1)&#160;the non-pro rata portion of that distribution over
    (2)&#160;the unitholder&#146;s tax basis for the share of
    Section&#160;751 Assets deemed relinquished in the exchange.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Basis of Units.</I>&#160;&#160;A unitholder&#146;s initial
    tax basis for his units will be the amount he paid for the units
    plus his share of our nonrecourse liabilities. That basis will
    be increased by his share of our income and by any increases in
    his share of our nonrecourse liabilities. That basis will be
    decreased, but not below zero, by distributions from us, by the
    unitholder&#146;s share of our losses, by any decreases in his
    share of our nonrecourse liabilities and by his share of our
    expenditures that are not deductible in computing taxable income
    and are not required to be capitalized. A unitholder will have
    no share of our debt that is recourse to the general partner,
    but will have a share, generally based on his share of profits,
    of our nonrecourse liabilities. Please read
    &#147;&#151;&#160;Disposition of Units&#160;&#151; Recognition
    of Gain or Loss.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Limitations on Deductibility of Losses.</I>&#160;&#160;The
    deduction by a unitholder of his share of our losses will be
    limited to the tax basis in his units and, in the case of an
    individual unitholder or a corporate unitholder, if more than
    50% of the value of the corporate unitholder&#146;s stock is
    owned directly or indirectly by or for five or fewer individuals
    or some tax-exempt organizations, to the amount for which the
    unitholder is considered to be &#147;at risk&#148; with respect
    to our activities, if that is less than his tax basis. A
    unitholder subject to these limitations must recapture losses
    deducted in previous years to the extent that distributions
    cause his at risk amount to be less than zero at the end of any
    taxable year. Losses disallowed to a unitholder or recaptured as
    a result of these limitations will carry forward and will be
    allowable to the extent that his tax basis or at risk amount,
    whichever is the limiting factor, is subsequently increased.
    Upon the taxable disposition of a unit, any gain recognized by a
    unitholder can be offset by losses that were previously
    suspended by the at risk limitation but may not be offset by
    losses suspended by the basis limitation. Any loss previously
    suspended by the at risk limitation in excess of that gain would
    no longer be utilizable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, a unitholder will be at risk to the extent of the
    tax basis of his units, excluding any portion of that basis
    attributable to his share of our nonrecourse liabilities,
    reduced by (i)&#160;any portion of that basis representing
    amounts otherwise protected against loss because of a guarantee,
    stop loss agreement or other similar arrangement and
    (ii)&#160;any amount of money he borrows to acquire or hold his
    units, if the lender of those borrowed funds owns an interest in
    us, is related to the unitholder or can look only to the units
    for repayment. A unitholder&#146;s at risk amount will increase
    or decrease as the tax basis of the unitholder&#146;s units
    increases or decreases, other than tax basis increases or
    decreases attributable to increases or decreases in his share of
    our nonrecourse liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the basis and at-risk limitations on the
    deductibility of losses, the passive loss limitations generally
    provide that individuals, estates, trusts and some closely-held
    corporations and personal service corporations can deduct losses
    from passive activities, which are generally trade or business
    activities in which the taxpayer does not materially
    participate, only to the extent of the taxpayer&#146;s income
    from those passive activities. The passive loss limitations are
    applied separately with respect to each publicly traded
    partnership. However, the application of the passive loss
    limitations to tiered publicly traded partnerships is uncertain.
    We will take the position that any passive losses we generate
    that are reasonably allocable to our investment in ETP will only
    be available to offset our passive income generated in the
    future that is reasonably allocable to our investment in ETP and
    will not be available to offset income from other passive
    activities or investments, including other investments in
    private businesses or investments we may make in other publicly
    traded partnerships. Moreover, because the passive loss
    limitations are applied separately with respect to each publicly
    traded partnership, any passive losses we generate will not be
    available to offset your income from other passive activities or
    investments, including your investments in other publicly traded
    partnerships, such as ETP, or salary or active business income.
    Further, your share of our net income may be offset by any
    suspended passive losses from your investment in us, but may not
    be offset by your current or carryover losses from other passive
    activities, including those attributable to other publicly
    traded partnerships. Passive losses that are not deductible
    because they exceed a unitholder&#146;s share of income we
    generate may be deducted in full when he disposes of his entire
    investment in us in a fully taxable transaction with an
    unrelated party.
</DIV>

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    <BR>
    66
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The IRS could take the position that for purposes of applying
    the passive loss limitation rules to tiered publicly traded
    partnerships, such as ETP and us, the related entities are
    treated as one publicly traded partnership. In that case, any
    passive losses we generate would be available to offset income
    from your investments in ETP. However, passive losses that are
    not deductible because they exceed a unitholder&#146;s share of
    income we generate would not be deductible in full until a
    unitholder disposes of his entire investment in both us and ETP
    in a fully taxable transaction with an unrelated party.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The passive loss limitations are applied after other applicable
    limitations on deductions, including the at risk rules and the
    basis limitation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Limitations on Interest Deductions.</I>&#160;&#160;The
    deductibility of a non-corporate taxpayer&#146;s
    &#147;investment interest expense&#148; is generally limited to
    the amount of that taxpayer&#146;s &#147;net investment
    income.&#148; Investment interest expense includes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    interest on indebtedness properly allocable to property held for
    investment;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our interest expense attributed to portfolio income;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the portion of interest expense incurred to purchase or carry an
    interest in a passive activity to the extent attributable to
    portfolio income.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The computation of a unitholder&#146;s investment interest
    expense will take into account interest on any margin account
    borrowing or other loan incurred to purchase or carry a unit.
    Net investment income includes gross income from property held
    for investment and amounts treated as portfolio income under the
    passive loss rules, less deductible expenses, other than
    interest, directly connected with the production of investment
    income, but generally does not include gains attributable to the
    disposition of property held for investment. The IRS has
    indicated that net passive income earned by a publicly traded
    partnership will be treated as investment income to its
    unitholders. In addition, the unitholder&#146;s share of our
    portfolio income will be treated as investment income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Entity-Level&#160;Collections.</I>&#160;&#160;If we are
    required or elect under applicable law to pay any federal,
    state, local or foreign income tax on behalf of any unitholder
    or the general partner or any former unitholder, we are
    authorized to pay those taxes from our funds. That payment, if
    made, will be treated as a distribution of cash to the partner
    on whose behalf the payment was made. If the payment is made on
    behalf of a person whose identity cannot be determined, we are
    authorized to treat the payment as a distribution to all current
    unitholders. We are authorized to amend the partnership
    agreement in the manner necessary to maintain uniformity of
    intrinsic tax characteristics of units and to adjust later
    distributions, so that after giving effect to these
    distributions, the priority and characterization of
    distributions otherwise applicable under the partnership
    agreement is maintained as nearly as is practicable. Payments by
    us as described above could give rise to an overpayment of tax
    on behalf of an individual partner in which event the partner
    would be required to file a claim in order to obtain a credit or
    refund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Allocation of Income, Gain, Loss and
    Deduction.</I>&#160;&#160;In general, if we have a net profit,
    our items of income, gain, loss and deduction will be allocated
    among the unitholders and our General Partner in accordance with
    their percentage interests in us. If we have a net loss for the
    entire year, that loss will be allocated first to our general
    partner and the unitholders in accordance with their percentage
    interests in us to the extent of their positive capital accounts
    and, second, to our general partner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Specified items of our income, gain, loss and deduction will be
    allocated to account for the difference between the tax basis
    and fair market value of our assets at the time of an offering,
    referred to in this discussion as &#147;Contributed
    Property.&#148; The effect of these allocations, referred to as
    &#147;Section&#160;704(c) allocations,&#148; to a unitholder
    purchasing units in this offering will be essentially the same
    as if the tax basis of our assets were equal to their fair
    market value at the time of this offering. In the event we issue
    additional common units or engage in certain other transactions
    in the future &#147;reverse Section&#160;704(c)
    allocations,&#148; similar to the Section&#160;704(c)
    allocations described above, will be made to all holders of
    partnership interests, including purchasers of common units in
    this offering, to account for the difference between the
    &#147;book&#148; basis for purposes of maintaining capital
    accounts and the fair market value of all property held by us at
    the time of
</DIV>

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    <BR>
    67
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the future transaction. In addition, items of recapture income
    will be allocated to the extent possible to the partner who was
    allocated the deduction giving rise to the treatment of that
    gain as recapture income in order to minimize the recognition of
    ordinary income by some unitholders. Finally, although ETP does
    not expect that our operations will result in the creation of
    negative capital accounts, if negative capital accounts
    nevertheless result, items of our income and gain will be
    allocated in an amount and manner to eliminate the negative
    balance as quickly as possible.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An allocation of items of our income, gain, loss or deduction,
    other than an allocation required by the Internal Revenue Code
    to eliminate the difference between a partner&#146;s
    &#147;book&#148; capital account, credited with the fair market
    value of Contributed Property, and &#147;tax&#148; capital
    account, credited with the tax basis of Contributed Property,
    referred to in this discussion as the &#147;Book-Tax
    Disparity,&#148; will generally be given effect for federal
    income tax purposes in determining a partner&#146;s share of an
    item of income, gain, loss or deduction only if the allocation
    has substantial economic effect. In any other case, a
    partner&#146;s share of an item will be determined on the basis
    of his interest in us, which will be determined by taking into
    account all the facts and circumstances, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    his relative contributions to us;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the interests of all the partners in profits and losses;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the interest of all the partners in cash flow;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the rights of all the partners to distributions of capital upon
    liquidation.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Vinson&#160;&#038; Elkins L.L.P. is of the opinion that, with
    the exception of the issues described in
    &#147;&#151;&#160;Section&#160;754 Election&#148; and
    &#147;&#151;&#160;Disposition of Units&#160;&#151; Allocations
    Between Transferors and Transferees,&#148; allocations under our
    partnership agreement will be given effect for federal income
    tax purposes in determining a partner&#146;s share of an item of
    income, gain, loss or deduction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Treatment of Short Sales.</I>&#160;&#160;A unitholder whose
    units are loaned to a &#147;short seller&#148; to cover a short
    sale of units may be considered as having disposed of those
    units. If so, he would no longer be treated for tax purposes as
    a partner with respect to those units during the period of the
    loan and may recognize gain or loss from the disposition. As a
    result, during this period:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any of our income, gain, loss or deduction with respect to those
    units would not be reportable by the unitholder;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any cash distributions received by the unitholder as to those
    units would be fully taxable;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all of these distributions would appear to be ordinary income.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Vinson&#160;&#038; Elkins L.L.P. has not rendered an opinion
    regarding the treatment of a unitholder where units are loaned
    to a short seller to cover a short sale of units; therefore,
    unitholders desiring to assure their status as partners and
    avoid the risk of gain recognition from a loan to a short seller
    are urged to modify any applicable brokerage account agreements
    to prohibit their brokers from borrowing their units. The IRS
    has announced that it is actively studying issues relating to
    the tax treatment of short sales of partnership interests.
    Please also read &#147;&#151;&#160;Disposition of
    Units&#160;&#151; Recognition of Gain or Loss.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Alternative Minimum Tax.</I>&#160;&#160;Each unitholder will
    be required to take into account his distributive share of any
    items of our income, gain, loss or deduction for purposes of the
    alternative minimum tax. The current minimum tax rate for
    noncorporate taxpayers is 26% on the first $175,000 of
    alternative minimum taxable income in excess of the exemption
    amount and 28% on any additional alternative minimum taxable
    income. Prospective unitholders are urged to consult with their
    tax advisors as to the impact of an investment in units on their
    liability for the alternative minimum tax.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Tax Rates.</I>&#160;&#160;In general, the highest effective
    United States federal income tax rate for individuals is
    currently 35.0% and the maximum United States federal income tax
    rate for net capital gains of an individual where the asset
    disposed of was held for more than twelve months at the time of
    disposition is scheduled to remain at 15.0% for years 2008
    through 2010 and then increase to 20% beginning January&#160;1,
    2011.
</DIV>

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    <BR>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Section&#160;754 Election.</I>&#160;&#160;We have made the
    election permitted by Section&#160;754 of the Internal Revenue
    Code. That election is irrevocable without the consent of the
    IRS. The election will generally permit us to adjust a unit
    purchaser&#146;s tax basis in our assets (&#147;inside
    basis&#148;) under Section&#160;743(b) of the Internal Revenue
    Code to reflect his purchase price. This election does not apply
    to a person who purchases units directly from us. The
    Section&#160;743(b) adjustment belongs to the purchaser and not
    to other unitholders. For purposes of this discussion, a
    unitholder&#146;s inside basis in our assets will be considered
    to have two components: (1)&#160;his share of our tax basis in
    our assets (&#147;common basis&#148;) and (2)&#160;his
    Section&#160;743(b) adjustment to that basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Where the remedial allocation method is adopted (which we have
    historically adopted as to all property other than certain
    goodwill properties and which we will generally adopt as to all
    properties going forward), the Treasury Regulations under
    Section&#160;743 of the Internal Revenue Code require a portion
    of the Section&#160;743(b) adjustment that is attributable to
    recovery property under Section&#160;168 of the Internal Revenue
    Code to be depreciated over the remaining cost recovery period
    for the Section&#160;704(c) built-in gain. If we elect a method
    other than the remedial method with respect to a goodwill
    property, Treasury
    <FONT style="white-space: nowrap">Regulation&#160;Section&#160;1.197-2(g)(3)</FONT>
    generally requires that the Section&#160;743(b) adjustment
    attributable to an amortizable Section&#160;197 intangible,
    which includes goodwill properties, should be treated as a
    newly-acquired asset placed in service in the month when the
    purchaser acquires the common unit. Under Treasury
    <FONT style="white-space: nowrap">Regulation&#160;Section&#160;1.167(c)-1(a)(6),</FONT>
    a Section&#160;743(b) adjustment attributable to property
    subject to depreciation under Section&#160;167 of the Internal
    Revenue Code, rather than cost recovery deductions under
    Section&#160;168, is generally required to be depreciated using
    either the straight-line method or the 150% declining balance
    method. If we elect a method other than the remedial method, the
    depreciation and amortization methods and useful lives
    associated with the Section&#160;743(b) adjustment, therefore,
    may differ from the methods and useful lives generally used to
    depreciate the inside basis in such properties. Under our
    partnership agreement, our general partner is authorized to take
    a position to preserve the uniformity of units even if that
    position is not consistent with these and any other Treasury
    Regulations. If we elect a method other than the remedial method
    with respect to a goodwill property, the common basis of such
    property is not amortizable. Please read
    &#147;&#151;&#160;Uniformity of Units.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although Vinson&#160;&#038; Elkins L.L.P. is unable to opine as
    to the validity of this approach because there is no direct or
    indirect controlling authority on this issue, we intend to
    depreciate the portion of a Section&#160;743(b) adjustment
    attributable to unrealized appreciation in the value of
    Contributed Property, to the extent of any unamortized Book-Tax
    Disparity, using a rate of depreciation or amortization derived
    from the depreciation or amortization method and useful life
    applied to the unamortized Book-Tax Disparity of the property,
    or treat that portion as
    <FONT style="white-space: nowrap">non-amortizable</FONT>
    to the extent attributable to property which is not amortizable.
    This method is consistent with the methods employed by other
    publicly traded partnerships but is arguably inconsistent with
    Treasury
    <FONT style="white-space: nowrap">Regulation&#160;Section&#160;1.167(c)-1(a)(6),</FONT>
    which is not expected to directly apply to a material portion of
    our assets, and Treasury
    <FONT style="white-space: nowrap">Regulation&#160;Section&#160;1.197-2(g)(3).</FONT>
    To the extent this Section&#160;743(b) adjustment is
    attributable to appreciation in value in excess of the
    unamortized Book-Tax Disparity, we will apply the rules
    described in the Treasury Regulations and legislative history.
    If we determine that this position cannot reasonably be taken,
    we may take a depreciation or amortization position under which
    all purchasers acquiring units in the same month would receive
    depreciation or amortization, whether attributable to common
    basis or a Section&#160;743(b) adjustment, based upon the same
    applicable rate as if they had purchased a direct interest in
    our assets. This kind of aggregate approach may result in lower
    annual depreciation or amortization deductions than would
    otherwise be allowable to some unitholders. Please read
    &#147;&#151;&#160;Uniformity of Units.&#148; A unitholder&#146;s
    tax basis for his common units is reduced by his share of our
    deductions (whether or not such deductions were claimed on an
    individual&#146;s income tax return) so that any position we
    take that understates deductions will overstate the common
    unitholder&#146;s basis in his common units, which may cause the
    unitholder to understate gain or overstate loss on any sale of
    such units. Please read &#147;&#151;&#160;Disposition of Common
    Units&#160;&#151; Recognition of Gain or Loss.&#148; The IRS may
    challenge our position with respect to depreciating or
    amortizing the Section&#160;743(b) adjustment we take to
    preserve the uniformity of the units. If such a challenge were
    sustained, the gain from the sale of units might be increased
    without the benefit of additional deductions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A Section&#160;754 election is advantageous if the
    transferee&#146;s tax basis in his units is higher than the
    units&#146; share of the aggregate tax basis of our assets
    immediately prior to the transfer. In that case, as a result of
    the
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    election, the transferee would have, among other items, a
    greater amount of depreciation and depletion deductions and his
    share of any gain or loss on a sale of our assets would be less.
    Conversely, a Section&#160;754 election is disadvantageous if
    the transferee&#146;s tax basis in his units is lower than those
    units&#146; share of the aggregate tax basis of our assets
    immediately prior to the transfer. Thus, the fair market value
    of the units may be affected either favorably or unfavorably by
    the election. A basis adjustment is required regardless of
    whether a Section&#160;754 election is made in the case of a
    transfer of an interest in us if we have a substantial
    built&#150;in loss immediately after the transfer, or if we
    distribute property and have a substantial basis reduction.
    Generally a built&#160;&#151; in loss or a basis reduction is
    substantial if it exceeds $250,000.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The calculations involved in the Section&#160;754 election are
    complex and will be made on the basis of assumptions as to the
    value of our assets and other matters. For example, the
    allocation of the Section&#160;743(b) adjustment among our
    assets must be made in accordance with the Internal Revenue
    Code. The IRS could seek to reallocate some or all of any
    Section&#160;743(b) adjustment allocated by us to our tangible
    assets or the tangible assets owned by ETP to goodwill instead.
    Goodwill, as an intangible asset, is generally nonamortizable or
    amortizable over a longer period of time or under a less
    accelerated method than our tangible assets. We cannot assure
    you that the determinations we make will not be successfully
    challenged by the IRS and that the deductions resulting from
    them will not be reduced or disallowed altogether. Should the
    IRS require a different basis adjustment to be made, and should,
    in our opinion, the expense of compliance exceed the benefit of
    the election, we may seek permission from the IRS to revoke our
    Section&#160;754 election. If permission is granted, a
    subsequent purchaser of units may be allocated more income than
    he would have been allocated had the election not been revoked.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax
    Treatment of Operations</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Accounting Method and Taxable Year.</I>&#160;&#160;We use the
    year ending December&#160;31 as our taxable year and the accrual
    method of accounting for federal income tax purposes. Each
    unitholder will be required to include in income his share of
    our income, gain, loss and deduction for our taxable year ending
    within or with his taxable year. In addition, a unitholder who
    has a taxable year ending on a date other than December&#160;31
    and who disposes of all of his units following the close of our
    taxable year but before the close of his taxable year must
    include his share of our income, gain, loss and deduction in
    income for his taxable year, with the result that he will be
    required to include in income for his taxable year his share of
    more than one year of our income, gain, loss and deduction.
    Please read &#147;&#151;&#160;Disposition of Units&#160;&#151;
    Allocations Between Transferors and Transferees.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Tax Basis, Depreciation and Amortization.</I>&#160;&#160;The
    tax basis of our assets and ETP&#146;s assets will be used for
    purposes of computing depreciation and cost recovery deductions
    and, ultimately, gain or loss on the disposition of these
    assets. The federal income tax burden associated with the
    difference between the fair market value of our assets and their
    tax basis immediately prior to this offering will be borne by
    the unitholders immediately prior to this offering. Please read
    &#147;&#151;&#160;Tax Consequences of Unit Ownership&#160;&#151;
    Allocation of Income, Gain, Loss and Deduction.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent allowable, we may elect to use the depreciation
    and cost recovery methods that will result in the largest
    deductions being taken in the early years after assets subject
    to these allowances are placed in service. Because our general
    partner may determine not to adopt the remedial method of
    allocation with respect to any difference between the tax basis
    and the fair market value of goodwill immediately prior to this
    or any future offering, we may not be entitled to any
    amortization deductions with respect to any goodwill properties
    conveyed to us on formation or held by us at the time of any
    future offering. Please read &#147;&#151;&#160;Uniformity of
    Units.&#148; Property we subsequently acquire or construct may
    be depreciated using accelerated methods permitted by the
    Internal Revenue Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we or ETP dispose of depreciable property by sale,
    foreclosure or otherwise, all or a portion of any gain,
    determined by reference to the amount of depreciation previously
    deducted and the nature of the property, may be subject to the
    recapture rules and taxed as ordinary income rather than capital
    gain. Similarly, a unitholder who has taken cost recovery or
    depreciation deductions with respect to property we own or ETP
    owns will likely be required to recapture some or all of those
    deductions as ordinary income upon a sale of
</DIV>

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    <BR>
    70
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    his interest in us. Please read &#147;&#151;&#160;Tax
    Consequences of Unit Ownership&#160;&#151; Allocation of Income,
    Gain, Loss and Deduction&#148; and &#147;&#151;&#160;Disposition
    of Units&#160;&#151; Recognition of Gain or Loss.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The costs incurred in selling our units (called
    &#147;syndication expenses&#148;) must be capitalized and cannot
    be deducted currently, ratably or upon our termination. There
    are uncertainties regarding the classification of costs as
    organization expenses, which may be amortized by us, and as
    syndication expenses, which may not be amortized by us. The
    underwriting discounts and commissions we incur will be treated
    as syndication expenses.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Valuation and Tax Basis of Our Properties.</I>&#160;&#160;The
    federal income tax consequences of the ownership and disposition
    of units will depend in part on our estimates of the relative
    fair market values, and the tax bases, of our assets and
    ETP&#146;s assets. Although we may from time to time consult
    with professional appraisers regarding valuation matters, we
    will make many of the relative fair market value estimates
    ourselves. These estimates and determinations of basis are
    subject to challenge and will not be binding on the IRS or the
    courts. If the estimates of fair market value or basis are later
    found to be incorrect, the character and amount of items of
    income, gain, loss or deductions previously reported by
    unitholders might change, and unitholders might be required to
    adjust their tax liability for prior years and incur interest
    and penalties with respect to those adjustments.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Disposition
    of Units</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Recognition of Gain or Loss.</I>&#160;&#160;Gain or loss will
    be recognized on a sale of units equal to the difference between
    the amount realized and the unitholder&#146;s tax basis for the
    units sold. A unitholder&#146;s amount realized will be measured
    by the sum of the cash or the fair market value of other
    property received by him plus his share of our nonrecourse
    liabilities. Because the amount realized includes a
    unitholder&#146;s share of our nonrecourse liabilities, the gain
    recognized on the sale of units could result in a tax liability
    in excess of any cash received from the sale.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior distributions from us in excess of cumulative net taxable
    income for a unit that decreased a unitholder&#146;s tax basis
    in that unit will, in effect, become taxable income if the unit
    is sold at a price greater than the unitholder&#146;s tax basis
    in that unit, even if the price received is less than his
    original cost.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as noted below, gain or loss recognized by a unitholder,
    other than a &#147;dealer&#148; in units, on the sale or
    exchange of a unit held for more than one year will generally be
    taxable as capital gain or loss. Capital gain recognized by an
    individual on the sale of units held more than twelve months
    will generally be taxed at a maximum rate of 15%. However, a
    portion, which will likely be substantial, of this gain or loss
    will be separately computed and taxed as ordinary income or loss
    under Section&#160;751 of the Internal Revenue Code to the
    extent attributable to assets giving rise to depreciation
    recapture or other &#147;unrealized receivables&#148; or to
    &#147;inventory items&#148; we own or ETP owns. The term
    &#147;unrealized receivables&#148; includes potential recapture
    items, including depreciation recapture. Ordinary income
    attributable to unrealized receivables, inventory items and
    depreciation recapture may exceed net taxable gain realized upon
    the sale of a unit and may be recognized even if there is a net
    taxable loss realized on the sale of a unit. Thus, a unitholder
    may recognize both ordinary income and a capital loss upon a
    sale of units. Net capital losses may offset capital gains and
    no more than $3,000 of ordinary income, in the case of
    individuals, and may only be used to offset capital gains in the
    case of corporations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The IRS has ruled that a partner who acquires interests in a
    partnership in separate transactions must combine those
    interests and maintain a single adjusted tax basis for all those
    interests. Upon a sale or other disposition of less than all of
    those interests, a portion of that tax basis must be allocated
    to the interests sold using an &#147;equitable
    apportionment&#148; method, which generally means that the tax
    basis allocated to the interest sold equals an amount that bears
    the same relation to the partner&#146;s tax basis in his entire
    interest in the partnership as the value of the interest sold
    bears to the value of the partner&#146;s entire interest in the
    partnership. Treasury Regulations under Section&#160;1223 of the
    Internal Revenue Code allow a selling unitholder who can
    identify units transferred with an ascertainable holding period
    to elect to use the actual holding period of the units
    transferred. Thus, according to the ruling, a unitholder will be
    unable to select high or low basis units to sell as would be the
    case with corporate stock, but, according to the regulations,
    may designate specific units sold for purposes of determining
    the holding period of units transferred. A unitholder electing
    to use the actual holding period of units transferred must
    consistently use that identification method for all subsequent
    sales or
</DIV>

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    <BR>
    71
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    exchanges of units. A unitholder considering the purchase of
    additional units or a sale of units purchased in separate
    transactions is urged to consult his tax advisor as to the
    possible consequences of this ruling and application of the
    regulations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Specific provisions of the Internal Revenue Code affect the
    taxation of some financial products and securities, including
    partnership interests, by treating a taxpayer as having sold an
    &#147;appreciated&#148; partnership interest, one in which gain
    would be recognized if it were sold, assigned or terminated at
    its fair market value, if the taxpayer or related persons
    enter(s) into:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a short sale;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an offsetting notional principal contract;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a futures or forward contract with respect to the partnership
    interest or substantially identical property.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Moreover, if a taxpayer has previously entered into a short
    sale, an offsetting notional principal contract or a futures or
    forward contract with respect to the partnership interest, the
    taxpayer will be treated as having sold that position if the
    taxpayer or a related person then acquires the partnership
    interest or substantially identical property. The Secretary of
    the Treasury is also authorized to issue regulations that treat
    a taxpayer that enters into transactions or positions that have
    substantially the same effect as the preceding transactions as
    having constructively sold the financial position.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Allocations Between Transferors and
    Transferees.</I>&#160;&#160;In general, our taxable income and
    losses will be determined annually, will be prorated on a
    monthly basis and will be subsequently apportioned among the
    unitholders in proportion to the number of units owned by each
    of them as of the opening of the applicable exchange on the
    first business day of the month, which we refer to in this
    prospectus as the &#147;Allocation Date.&#148; However, gain or
    loss realized on a sale or other disposition of our assets other
    than in the ordinary course of business will be allocated among
    the unitholders on the Allocation Date in the month in which
    that gain or loss is recognized. As a result, a unitholder
    transferring units may be allocated income, gain, loss and
    deduction realized after the date of transfer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The use of this method may not be permitted under existing
    Treasury Regulations. Accordingly, Vinson&#160;&#038; Elkins
    L.L.P. is unable to opine on the validity of this method of
    allocating income and deductions between transferor and
    transferee unitholders. If this method is not allowed under the
    Treasury Regulations, or only applies to transfers of less than
    all of the unitholder&#146;s interest, our taxable income or
    losses might be reallocated among the unitholders. We are
    authorized to revise our method of allocation between transferor
    and transferee unitholders, as well as unitholders whose
    interests vary during a taxable year, to conform to a method
    permitted under future Treasury Regulations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A unitholder who owns units at any time during a quarter and who
    disposes of them prior to the record date set for a cash
    distribution for that quarter will be allocated items of our
    income, gain, loss and deductions attributable to that quarter
    but will not be entitled to receive that cash distribution.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Notification Requirements.</I>&#160;&#160;A unitholder who
    sells any of his units is generally required to notify us in
    writing of that sale within 30&#160;days after the sale (or, if
    earlier, January 15 of the year following the sale). A purchaser
    of units who purchases units from another unitholder generally
    is also required to notify us in writing of that purchase within
    30&#160;days after the purchase. We are required to notify the
    IRS of that transaction and to furnish specified information to
    the transferor and transferee. Failure to notify us of a
    purchase may, in some cases, lead to the imposition of
    penalties. However, these reporting requirements do not apply to
    a sale by an individual who is a citizen of the United States
    and who effects the sale or exchange through a broker, who will
    satisfy such requirements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Constructive Termination.</I>&#160;&#160;We will be
    considered to have terminated our partnership for federal income
    tax purposes if there is a sale or exchange of 50% or more of
    the total interests in our capital and profits within a
    twelve-month period. Likewise, ETP will be considered to have
    terminated its partnership for federal income tax purposes if
    there is a sale or exchange of 50% or more of the total
    interests in ETP&#146;s capital and profits within a
    twelve-month period. A termination would, among other things,
    result in the closing of our and/or ETP&#146;s taxable years, as
    the case may be, for all unitholders, which would result in us
    and ETP both
</DIV>

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    <BR>
    72
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    filing two tax returns (and unitholders receiving two
    <FONT style="white-space: nowrap">Schedule&#160;K-1&#146;s)</FONT>
    for one fiscal year, and could result in a deferral of certain
    deductions allowable in computing our taxable income for the
    year in which the termination occurs. Thus, if this occurs you
    may be allocated an increased amount of taxable income for the
    year in which we or ETP is considered to be terminated as a
    percentage of the cash distributed to you with respect to that
    period. Although the amount of increase cannot be estimated
    because it depends upon numerous factors including the timing of
    the termination, the amount could be material. Moreover, in the
    case of a unitholder reporting on a taxable year other than a
    fiscal year ending December&#160;31, the closing of our taxable
    year may result in more than twelve months of our taxable income
    or loss being includable in his taxable income for the year of
    termination.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our termination, or the termination of ETP, currently would not
    affect our classification, or the classification of ETP, as a
    partnership for federal income tax purposes, but instead, we or
    ETP would be treated as a new partnership for tax purposes. If
    treated as a new partnership, we must make new tax elections and
    could be subject to penalties if we are unable to determine that
    a termination occurred.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Uniformity
    of Units</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because we cannot match transferors and transferees of units, we
    must maintain uniformity of the economic and tax characteristics
    of the units to a purchaser of these units. In the absence of
    uniformity, we may be unable to completely comply with a number
    of federal income tax requirements, both statutory and
    regulatory. A lack of uniformity can result from a literal
    application of Treasury
    <FONT style="white-space: nowrap">Regulation&#160;Section&#160;1.167(c)-1(a)(6)</FONT>
    and Treasury
    <FONT style="white-space: nowrap">Regulation&#160;Section&#160;1.197-2(g)(3).</FONT>
    Any non-uniformity could have a negative impact on the value of
    the units. Please read &#147;&#151;&#160;Tax Consequences of
    Unit Ownership&#160;&#151; Section&#160;754 Election.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to depreciate the portion of a Section&#160;743(b)
    adjustment attributable to unrealized appreciation in the value
    of Contributed Property, to the extent of any unamortized
    Book-Tax Disparity, using a rate of depreciation or amortization
    derived from the depreciation or amortization method and useful
    life applied to the unamortized Book-Tax Disparity of that
    property, or treat that portion as nonamortizable, to the extent
    attributable to property the common basis of which is not
    amortizable, consistent with the regulations under
    Section&#160;743 of the Internal Revenue Code, even though that
    position may be inconsistent with Treasury
    <FONT style="white-space: nowrap">Regulation&#160;Section&#160;1.167(c)-1(a)(6),</FONT>
    which is not expected to directly apply to a material portion of
    our assets, and Treasury
    <FONT style="white-space: nowrap">Regulation&#160;Section&#160;1.197-2(g)(3).</FONT>
    Please read &#147;&#151;&#160;Tax Consequences of Unit
    Ownership&#160;&#151; Section&#160;754 Election.&#148; To the
    extent that the Section&#160;743(b) adjustment is attributable
    to appreciation in value in excess of the unamortized Book-Tax
    Disparity, we will apply the rules described in the Treasury
    Regulations and legislative history. If we determine that this
    position cannot reasonably be taken, we may adopt a depreciation
    and amortization position under which all purchasers acquiring
    units in the same month would receive depreciation and
    amortization deductions, whether attributable to a common basis
    or Section&#160;743(b) adjustment, based upon the same
    applicable rate as if they had purchased a direct interest in
    our property. If this position is adopted, it may result in
    lower annual depreciation and amortization deductions than would
    otherwise be allowable to some unitholders and risk the loss of
    depreciation and amortization deductions not taken in the year
    that these deductions are otherwise allowable. This position
    will not be adopted if we determine that the loss of
    depreciation and amortization deductions will have a material
    adverse effect on the unitholders. If we choose not to utilize
    this aggregate method, we may use any other reasonable
    depreciation and amortization method to preserve the uniformity
    of the intrinsic tax characteristics of any units that would not
    have a material adverse effect on the unitholders. The IRS may
    challenge any method of depreciating the Section&#160;743(b)
    adjustment described in this paragraph. If this challenge were
    sustained, the uniformity of units might be affected, and the
    gain from the sale of units might be increased without the
    benefit of additional deductions. Please read
    &#147;&#151;&#160;Disposition of Units&#160;&#151; Recognition
    of Gain or Loss.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax-Exempt
    Organizations and Other Investors</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Ownership of units by employee benefit plans, other tax-exempt
    organizations, non-resident aliens, foreign corporations and
    other foreign persons raises issues unique to those investors
    and, as described below, may have substantially adverse tax
    consequences to them.
</DIV>

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    <BR>
    73
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Employee benefit plans and most other organizations exempt from
    federal income tax, including individual retirement accounts and
    other retirement plans, are subject to federal income tax on
    unrelated business taxable income. Virtually all of our income
    allocated to a unitholder that is a tax-exempt organization will
    be unrelated business taxable income and will be taxable to them.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Non-resident aliens and foreign corporations, trusts or estates
    that own units will be considered to be engaged in business in
    the United States because of the ownership of units. As a
    consequence, they will be required to file federal tax returns
    to report their share of our income, gain, loss or deduction and
    pay federal income tax at regular rates on their share of our
    net income or gain. Moreover, under rules applicable to publicly
    traded partnerships, we will withhold at the highest applicable
    effective tax rate from cash distributions made quarterly to
    foreign unitholders. Each foreign unitholder must obtain a
    taxpayer identification number from the IRS and submit that
    number to our transfer agent on a
    <FONT style="white-space: nowrap">Form&#160;W-8BEN</FONT>
    or applicable substitute form in order to obtain credit for
    these withholding taxes. A change in applicable law may require
    us to change these procedures.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, because a foreign corporation that owns units will
    be treated as engaged in a United States trade or business, that
    corporation may be subject to the United States branch profits
    tax at a rate of 30%, in addition to regular federal income tax,
    on its share of our income and gain, as adjusted for changes in
    the foreign corporation&#146;s &#147;U.S.&#160;net equity,&#148;
    which are effectively connected with the conduct of a United
    States trade or business. That tax may be reduced or eliminated
    by an income tax treaty between the United States and the
    country in which the foreign corporate unitholder is a
    &#147;qualified resident.&#148; In addition, this type of
    unitholder is subject to special information reporting
    requirements under Section&#160;6038C of the Internal Revenue
    Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under a ruling of the IRS, a foreign unitholder who sells or
    otherwise disposes of a unit will be subject to federal income
    tax on gain realized on the sale or disposition of that unit to
    the extent that this gain is effectively connected with a United
    States trade or business of the foreign unitholder. Because a
    foreign unitholder is considered to be engaged in business in
    the United States by virtue of the ownership of units, under
    this ruling a foreign unitholder who sells or otherwise disposes
    of a unit generally will be subject to federal income tax on
    gain realized on the sale or disposition of units. Apart from
    the ruling, a foreign unitholder will not be taxed or subject to
    withholding upon the sale or disposition of a unit if he has
    owned less than 5% in value of the units during the five-year
    period ending on the date of the disposition and if the units
    are regularly traded on an established securities market at the
    time of the sale or disposition.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Administrative
    Matters</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Information Returns and Audit Procedures.</I>&#160;&#160;We
    intend to furnish to each unitholder, within 90&#160;days after
    the close of each calendar year, specific tax information,
    including a
    <FONT style="white-space: nowrap">Schedule&#160;K-1,</FONT>
    which describes his share of our income, gain, loss and
    deduction for our preceding taxable year. In preparing this
    information, which will not be reviewed by counsel, we will take
    various accounting and reporting positions, some of which have
    been mentioned earlier, to determine his share of income, gain,
    loss and deduction. We cannot assure you that those positions
    will yield a result that conforms to the requirements of the
    Internal Revenue Code, Treasury Regulations or administrative
    interpretations of the IRS. Neither we nor Vinson&#160;&#038;
    Elkins L.L.P. can assure prospective unitholders that the IRS
    will not successfully contend in court that those positions are
    impermissible. Any challenge by the IRS could negatively affect
    the value of the units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The IRS may audit our federal income tax information returns.
    Adjustments resulting from an IRS audit may require each
    unitholder to adjust a prior year&#146;s tax liability, and
    possibly may result in an audit of his return. Any audit of a
    unitholder&#146;s return could result in adjustments not related
    to our returns as well as those related to our returns.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Partnerships generally are treated as separate entities for
    purposes of federal tax audits, judicial review of
    administrative adjustments by the IRS and tax settlement
    proceedings. The tax treatment of partnership items of income,
    gain, loss and deduction are determined in a partnership
    proceeding rather than in separate proceedings with the
    partners. The Internal Revenue Code requires that one partner be
    designated as the &#147;Tax Matters Partner&#148; for these
    purposes. The partnership agreement names the general partner as
    our Tax Matters Partner.
</DIV>

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    <BR>
    74
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Tax Matters Partner will make some elections on our behalf
    and on behalf of unitholders. In addition, the Tax Matters
    Partner can extend the statute of limitations for assessment of
    tax deficiencies against unitholders for items in our returns.
    The Tax Matters Partner may bind a unitholder with less than a
    1% profits interest in us to a settlement with the IRS unless
    that unitholder elects, by filing a statement with the IRS, not
    to give that authority to the Tax Matters Partner. The Tax
    Matters Partner may seek judicial review, by which all the
    unitholders are bound, of a final partnership administrative
    adjustment and, if the Tax Matters Partner fails to seek
    judicial review, judicial review may be sought by any unitholder
    having at least a 1% interest in profits or by any group of
    unitholders having in the aggregate at least a 5% interest in
    profits. However, only one action for judicial review will go
    forward, and each unitholder with an interest in the outcome may
    participate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A unitholder must file a statement with the IRS identifying the
    treatment of any item on his federal income tax return that is
    not consistent with the treatment of the item on our return.
    Intentional or negligent disregard of this consistency
    requirement may subject a unitholder to substantial penalties.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Nominee Reporting.</I>&#160;&#160;Persons who hold an
    interest in us as a nominee for another person are required to
    furnish to us:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the name, address and taxpayer identification number of the
    beneficial owner and the nominee;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    whether the beneficial owner is:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;a person that is not a United States person;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;a foreign government, an international organization or
    any wholly owned agency or instrumentality of either of the
    foregoing;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;a tax-exempt entity;
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount and description of units held, acquired or
    transferred for the beneficial owner;&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    specific information including the dates of acquisitions and
    transfers, means of acquisitions and transfers, and acquisition
    cost for purchases, as well as the amount of net proceeds from
    sales.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Brokers and financial institutions are required to furnish
    additional information, including whether they are United States
    persons and specific information on units they acquire, hold or
    transfer for their own account. A penalty of $50 per failure, up
    to a maximum of $100,000 per calendar year, is imposed by the
    Internal Revenue Code for failure to report that information to
    us. The nominee is required to supply the beneficial owner of
    the units with the information furnished to us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Accuracy-Related Penalties.</I>&#160;&#160;An additional tax
    equal to 20% of the amount of any portion of an underpayment of
    tax that is attributable to one or more specified causes,
    including negligence or disregard of rules or regulations,
    substantial understatements of income tax and substantial
    valuation misstatements, is imposed by the Internal Revenue
    Code. No penalty will be imposed, however, for any portion of an
    underpayment if it is shown that there was a reasonable cause
    for that portion and that the taxpayer acted in good faith
    regarding that portion.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For individuals, a substantial understatement of income tax in
    any taxable year exists if the amount of the understatement
    exceeds the greater of 10% of the tax required to be shown on
    the return for the taxable year or $5,000. The amount of any
    understatement subject to penalty generally is reduced if any
    portion is attributable to a position adopted on the return:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;for which there is, or was, &#147;substantial
    authority&#148;;&#160;or
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;as to which there is a reasonable basis and the
    pertinent facts of that position are disclosed on the return.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If any item of income, gain, loss or deduction included in the
    distributive shares of unitholders for a given year might result
    in that kind of an &#147;understatement&#148; of income for
    which no &#147;substantial authority&#148; exists, we will
    disclose the pertinent facts on our return. In addition, we will
    make a reasonable effort to furnish sufficient information for
    unitholders to make adequate disclosure on their returns and to
    take other actions as may be appropriate to permit unitholders
    to avoid liability for penalties. More stringent rules apply to
    &#147;tax shelters,&#148; which we do not believe includes us.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    75
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A substantial valuation misstatement exists if the value of any
    property, or the adjusted basis of any property, claimed on a
    tax return is 150% or more of the amount determined to be the
    correct amount of the valuation or adjusted basis. No penalty is
    imposed unless the portion of the underpayment attributable to a
    substantial valuation misstatement exceeds $5,000 ($10,000 for
    most corporations). If the valuation claimed on a return is 200%
    or more than the correct valuation, the penalty imposed
    increases to 40%.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Reportable Transactions.</I>&#160;&#160;If we were to engage
    in a &#147;reportable transaction,&#148; we (and possibly you
    and others) would be required to make a detailed disclosure of
    the transaction to the IRS. A transaction may be a reportable
    transaction based upon any of several factors, including the
    fact that it is a type of tax avoidance transaction publicly
    identified by the IRS as a &#147;listed transaction&#148; or
    that it produces certain kinds of losses for partnerships,
    individuals, S&#160;corporations, and trusts in excess of
    $2&#160;million in any single year, or $4&#160;million in any
    combination of tax years. Our participation in a reportable
    transaction could increase the likelihood that our federal
    income tax information return (and possibly your tax return)
    would be audited by the IRS. Please read &#147;&#151;
    Information Returns and Audit Procedures.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Moreover, if we were to participate in a reportable transaction
    with a significant purpose to avoid or evade tax, or in any
    listed transaction, you may be subject to the following
    provisions of the American Jobs Creation Act of 2004:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    accuracy-related penalties with a broader scope, significantly
    narrower exceptions, and potentially greater amounts than
    described above at &#147;&#151; Accuracy-Related Penalties,&#148;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    for those persons otherwise entitled to deduct interest on
    federal tax deficiencies, nondeductibility of interest on any
    resulting tax liability&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    in the case of a listed transaction, an extended statute of
    limitations.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We do not expect to engage in any &#147;reportable
    transactions.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">State,
    Local, Foreign and Other Tax Considerations</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to federal income taxes, you likely will be subject
    to other taxes, such as state, local and foreign income taxes,
    unincorporated business taxes, and estate, inheritance or
    intangible taxes that may be imposed by the various
    jurisdictions in which we or ETP do business or own property or
    in which you are a resident. Although an analysis of those
    various taxes is not presented here, each prospective unitholder
    should consider their potential impact on his investment in us.
    We or ETP may also own property or do business in other
    jurisdictions in the future. Although you may not be required to
    file a return and pay taxes in some jurisdictions because your
    income from that jurisdiction falls below the filing and payment
    requirement, you will be required to file income tax returns and
    to pay income taxes in many other jurisdictions in which we may
    do business or own property and may be subject to penalties for
    failure to comply with those requirements. In some
    jurisdictions, tax losses may not produce a tax benefit in the
    year incurred and may not be available to offset income in
    subsequent taxable years. Some jurisdictions may require us, or
    we may elect, to withhold a percentage of income from amounts to
    be distributed to a unitholder who is not a resident of the
    jurisdiction. Withholding, the amount of which may be greater or
    less than a particular unitholder&#146;s income tax liability to
    the jurisdiction, generally does not relieve a nonresident
    unitholder from the obligation to file an income tax return.
    Amounts withheld will be treated as if distributed to
    unitholders for purposes of determining the amounts distributed
    by us. Please read &#147;&#151; Tax Consequences of Unit
    Ownership&#160;&#151; Entity-Level&#160;Collections.&#148; Based
    on current law and our estimate of our future operations, the
    general partner anticipates that any amounts required to be
    withheld will not be material.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is the responsibility of each unitholder to investigate the
    legal and tax consequences, under the laws of pertinent
    jurisdictions, of his investment in us. Accordingly, each
    prospective unitholder is urged to consult, and depend upon, his
    tax counsel or other advisor with regard to those matters.
    Further, it is the responsibility of each unitholder to file all
    state, local and foreign, as well as United States federal tax
    returns that may be required of him. Vinson&#160;&#038; Elkins
    L.L.P. has not rendered an opinion on the state, local or
    foreign tax consequences of an investment in us.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    76
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "SELLING UNITHOLDERS" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='130'></A><B><FONT style="font-family: 'Times New Roman', Times">SELLING
    UNITHOLDERS</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus covers the offering for resale of up to
    66,625,100&#160;common units by the selling unitholders
    identified below. No offer or sale may occur unless this
    prospectus has been declared effective by the SEC, and remains
    effective at the time such selling unitholder offers or sells
    such common units. We are required to update this prospectus to
    reflect material developments in our business, financial
    position and results of operations.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth certain information regarding the
    selling unitholders&#146; beneficial ownership of our common
    units as of September&#160;25, 2007. The information presented
    below is based solely on our review of the Schedule&#160;13D or
    13G Statement of Beneficial Ownership filed by such person with
    the SEC or information otherwise provided by the selling
    unitholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="42%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Percentage of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Common Units<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Common Units <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Common Units<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Beneficially<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Common Units<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Beneficially<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>That<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Owned<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name of Selling Unitholder</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Beneficially Owned</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Owned</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>May be Sold(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>After Offering</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Agile Performance Fund, LLC(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37,547
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37,547
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Anderson, Steven R
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    186,404
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    186,404
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ben Van de Bunt and Laura Fox Living Trust(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36,484
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36,484
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Brantley, Jr., David W
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    235,736
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    102,646
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    133,090
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Burrow, Jeffrey Woodley
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    401,471
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    205,293
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    196,178
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Continental Casualty Company(3)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    274,250
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    109,450
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    164,800
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    The Cushing GP Strategies Fund, LP(3)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    367,729
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    200,657
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    167,072
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    The Cushing MLP Opportunity Fund&#160;&#160;I,LP(3)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,813,444
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,355,444
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    458,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    DBB Energy Limited Partnership(4)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    783,218
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    341,037
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    442,181
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Denham Commodity Partners Fund&#160;LP(5)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,394,636
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.97
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,394,636
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    ET Company Ltd.(6)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    49,126
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    49,126
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    ET GP, LLC(6)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,796
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,796
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    ETC Investors, Ltd.(6)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,454,140
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,454,140
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    FHM Investments LLC(7)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,790,444
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,790,444
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    GPS High Yield Equities Fund&#160;LP(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    180,181
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    180,181
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    GPS Income Fund&#160;LP(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    735,491
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    735,491
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    GPS New Equity Fund&#160;LP(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    230,036
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    230,036
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Greenhill Capital Partners, L.P.(8)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,092,079
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,092,079
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Greenhill Capital Partners (Cayman), L.P.(8)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    298,936
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    298,936
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Greenhill Capital Partners (Executives), L.P.(8)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    330,203
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    330,203
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Greenhill Capital, L.P.(8)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    659,271
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    659,271
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Hartz Capital MLP, LLC(9)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    912,076
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    912,076
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    HFR RVA GPS Master Trust(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    131,338
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    131,338
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Kayne Anderson Capital Income Partners (QP), L.P.(10)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    78,223
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    78,223
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Kayne Anderson MLP Fund, L.P.(10)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    703,692
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    703,692
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Kayne Anderson MLP Investment Company(10)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    364,831
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    364,831
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Kellen Holdings, LLC(11)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,437,077
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.34
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,437,077
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Kile, Lon
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    169,398
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    169,398
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Knee Family Trust(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18,242
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18,242
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Kutch, George Clayton
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    471,472
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    205,293
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    266,179
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Kutch, Tracy
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    205,293
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    205,293
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Lorenz, Renee Y
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    410,586
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    410,586
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    77
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="42%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Percentage of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Common Units<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Common Units <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Common Units<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Beneficially<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Common Units<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Beneficially<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>That<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Owned<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name of Selling Unitholder</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Beneficially Owned</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Owned</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>May be Sold(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>After Offering</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    L&#038;E McMillian Family Partnership Ltd(12)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    205,293
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    205,293
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    McCambro, Ltd.(13)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    136,586
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    136,586
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    McReynolds Energy Partners, L.P.(14)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,359,553
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.96
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,359,553
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Nolan, John
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    404,476
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    404,476
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Oasis Gas Partners LLC(15)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,084,881
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.73
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,084,881
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    PH Investments, LLC(16)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,191,535
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,191,535
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Phillips Oil&#160;&#038; Gas, Inc.(17)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    388,178
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    169,024
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    219,154
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Rainbow Investments Company(18)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    62,135
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    62,135
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    The Renker Family Trust(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36,484
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36,484
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    RMS-VMS, Ltd.(13)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,210,742
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    584,621
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    626,121
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Royal Bank of Canada(19)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,741,789
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.58
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,397,698
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    344,091
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Stallcup, John M
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,534
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,534
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Swank MLP Convergence Fund, LP(3)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    364,831
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    364,831
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Tortoise Energy Capital Corporation(20)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    547,246
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    547,246
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Tortoise Energy Infrastructure Corporation(20)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    729,661
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    729,661
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    UNC Investment Fund, LLC(21)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    605,658
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    405,658
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    200,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Kelcy Warren Partners, L.P.(22)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,264,898
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.75
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,136,398
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    128,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    WH Energy Investors, L.L.C.(23)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,014,147
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,014,147
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    The William&#160;P. and Jane&#160;C. Williams Family
    Partnership, Ltd.(24)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    721,207
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    721,207
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    ZLP Fund, L.P.(25)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    625,782
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    625,782
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Totals</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    <B>69,970,466</B>
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    <B>31.40</B>
</TD>
<TD nowrap align="left" valign="bottom">
    <B>%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    <B>66,625,100</B>
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    <B>3,345,366</B>
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    *&#160;</TD>
    <TD></TD>
    <TD valign="bottom">
    Less than 1%</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Because the selling unitholders may sell all or a portion of the
    common units registered hereby, we cannot estimate the number or
    percentage of common units that the selling unitholders will
    hold upon completion of the offering. Accordingly, the
    information presented in this table assumes that the selling
    unitholders will sell all of their common units registered
    pursuant hereto.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    This selling unitholder has advised that the natural person with
    voting and dispositive power over the common units beneficially
    owned by the selling unitholder is Steven Sugarman of GPS
    Partners LLC.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    This selling unitholder has advised that the natural person with
    voting and dispositive power over the common units beneficially
    owned by the selling unitholder is Jerry V. Swank as Managing
    Partner of Swank Energy Income Advisors, LP.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    DBB Energy Limited Partnership is a limited partnership owned by
    David W. Brantley, Jr. who may be deemed to beneficially own the
    limited partner interests held by DBB Energy Limited Partnership
    to the extent of his interest therein.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    Denham Commodity Partners Fund&#160;LP is an investment vehicle
    which is managed by Denham Commodity Partners GP LP as
    investment adviser. Denham GP LLC is the sole general partner of
    Denham Commodity Partners GP LP. Stuart Porter is the managing
    member of Denham GP LLC. Each of these persons may be deemed to
    have beneficial ownership of the securities.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (6) </TD>
    <TD></TD>
    <TD valign="bottom">
    Ray&#160;C. Davis, Kelcy&#160;L. Warren and Natural Gas
    Partners&#160;VI, L.P. (&#147;NGP&#148;) are the sole members of
    ET&#160;GP,&#160;LLC. Therefore, each of Messrs.&#160;Davis and
    Warren and NGP may be deemed to have beneficial ownership of the
    common units owned by ETC GP, LLC to the extent of their
    ownership interests therein. G.F.W. Energy&#160;VI L.P. and
    GFW&#160;VI, L.L.C. may be deemed to beneficially own the common
    units owned of record by NGP, by virtue of GFW&#160;VI, L.L.C.
    being the sole general partner of G.F.W. </TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    78
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Energy&#160;VI L.P. G.F.W. Energy&#160;VI, L.P., being the sole
    general partner of NGP. Messrs.&#160;Kenneth&#160;A. Hersh and
    David&#160;R. Albin, who constitute a majority of the members of
    such entity, may also be deemed to share power to vote or to
    direct the vote and to dispose or to direct the disposition of,
    the common units. The general partner of ETC Investors, Ltd. is
    ET Company, Ltd., a limited partnership owned by
    Messrs.&#160;Davis and Warren.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (7) </TD>
    <TD></TD>
    <TD valign="bottom">
    FHM Investments is owned by a group of former senior executive
    officers of ETP and one current senior executive officer of ETP.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (8) </TD>
    <TD></TD>
    <TD valign="bottom">
    GCP Managing Partner, L.P., the managing general partners of the
    GCP Funds, as well as Greenhill Capital Partners, LLC, its
    general partner and Greenhill&#160;&#038; Co., Inc., the sole
    member of Greenhill Capital Partners, LLC, may be deemed to
    beneficially own the units held by the Funds. Decisions
    regarding the investments by the Funds are made by an investment
    committee, the composition of which may change from time to
    time. The current members of the investment committee are Robert
    H. Niehaus, Scott L. Bok, Robert F. Greenhill, Simon A. Borrows,
    Kevin A. Bousquette and V. Frank Pottow, each of whom disclaims
    beneficial ownership of the units held by the Funds except to
    the extent of his pecuniary interest therein. In addition, with
    respect to decisions to dispose of the units held by the Funds,
    GCP Managing Partner, L.P. requires the consent of GCP, L.P.,
    the general partner of which is GCP 2000, LLC, which in turn is
    controlled by its senior members, Messrs.&#160;Niehaus, Bok,
    Greenhill and Pottow. GCP, L.P. and GCP 2000, LLC may also be
    deemed to beneficially own the units held by the Funds. The
    address of the Funds is 300 Park Avenue, New York, New York
    10022. Each of the Funds is an affiliate of a registered broker
    dealer and has informed us that it acquired the units in the
    ordinary course of its business and at the time the units were
    acquired, it had no agreements or understandings, directly or
    indirectly, with us or any of our affiliates or any person
    acting on our behalf or on behalf of our affiliates to
    distribute these shares.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (9) </TD>
    <TD></TD>
    <TD valign="bottom">
    Edward J. Stern, Ronald J. Bangs and Jonathan B. Schindel, in
    their capacity as officers of Hartz Capital, Inc., which is the
    sole manager of Hartz Capital MLP, LLC, share voting and
    investment control over the shares held by Hartz Capital MLP,
    LLC. Each of Messers. Bangs and Schindel disclaims beneficial
    ownership of all of such shares.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (10) </TD>
    <TD></TD>
    <TD valign="bottom">
    The number of common units is as of July&#160;19, 2007 and does
    not include an aggregate of 1,304,223&#160;common units owned by
    accounts managed by Kayne Anderson Capital Advisors, L.P. or KA
    Fund&#160;Advisors, L.P., each of which is an affiliate of the
    selling shareholder. Richard A. Kayne, in his capacity as the
    majority shareholder of Kayne Anderson Capital Advisors, L.P.,
    holds voting and dispositive power with respect to the
    securities held by the selling unitholder. KA Associates, Inc.,
    an affiliate of the selling unitholder, is a broker-dealer
    registered pursuant to Section&#160;15(b) of the Exchange Act
    and is a member of the NASD. The selling unitholder
    (i)&#160;purchased the securities for the selling
    unitholder&#146;s own account, not as a nominee or agent, in the
    ordinary course of business and with no intention of selling or
    otherwise distributing securities in any transaction in
    violation of securities laws and (ii)&#160;at the time of
    purchase, the selling unitholder did not have any agreement or
    understanding, direct or indirect, with any other person to sell
    or otherwise distribute the purchased securities.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (11) </TD>
    <TD></TD>
    <TD valign="bottom">
    Kellen Holdings, LLC, a Delaware limited liability company, is a
    direct subsidiary of Liberty Energy Holdings, LLC, a Delaware
    LLC (&#147;LEH&#148;), and is an indirect subsidiary of Liberty
    Mutual Holding Company Inc., a Massachusetts mutual holding
    company. Liberty Mutual Holding Company Inc. is the ultimate
    controlling person of Kellen Holdings, LLC. Liberty Mutual
    Holding Company Inc. is a mutual holding company wherein its
    members are entitled to vote at meetings of the company. No such
    member is entitled to cast 10% or more of the votes. Liberty
    Mutual Holding Company Inc. has issued no voting securities.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (12) </TD>
    <TD></TD>
    <TD valign="bottom">
    L&#038;e McMillian Family Partnership Ltd is a limited
    partnership owned by Leonard McMillian, who may be deemed to
    beneficially own the limited partner interests held by the
    L&#038;e McMillian Family Partnership Ltd to the extent of his
    interest therein.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    79
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (13) </TD>
    <TD></TD>
    <TD valign="bottom">
    McCambro, Ltd. and RMS-VMS, Ltd. are limited partnerships owned
    by Roger M. Smith who may be deemed to beneficially own the
    limited partner interests held by McCambro, Ltd. and RMS-VMS,
    Ltd., to the extent of his interest therein.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (14) </TD>
    <TD></TD>
    <TD valign="bottom">
    McReynolds Energy Partners, L.P. is owned by Mr.&#160;McReynolds
    who may be deemed to beneficially own the limited partner
    interests held by McReynolds Energy Partners, L.P. to the extent
    of his respective interests therein.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (15) </TD>
    <TD></TD>
    <TD valign="bottom">
    SF Holding Corp. may be deemed to beneficially own the common
    units owned of record by Oasis Gas Partners LLC, because SF
    Holding Corp. is the sole manager of Oasis Gas Partners LLC. The
    natural persons who hold voting and dispositive power over the
    units are the board of directors of SF Holdings Corp.,
    Warren&#160;A. Stephens, W.R.&#160;Stephens Jr., Elizabeth
    Stephens Campbell, and Douglas&#160;H. Martin.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (16) </TD>
    <TD></TD>
    <TD valign="bottom">
    PH Investments LLC is an investment vehicle which is managed by
    Amos B. Hostetter,&#160;Jr. Amos B. Hostetter,&#160;Jr. is the
    sole managing member of PH Investments, LLC. Amos B. Hostetter
    is the only person deemed to have beneficial ownership of the
    securities.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (17) </TD>
    <TD></TD>
    <TD valign="bottom">
    This selling unitholder has advised that the natural person with
    voting and dispositive power over the common units beneficially
    owned by the selling unitholder is Fred L. Phillips, President
    of Phillips Oil&#160;&#038; Gas, Inc.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (18) </TD>
    <TD></TD>
    <TD valign="bottom">
    Rainbow Investments Company is an investment company controlled
    by Mr.&#160;Steven G. Herbst. Mr.&#160;Herbst may be deemed to
    have beneficial ownership of the securities.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (19) </TD>
    <TD></TD>
    <TD valign="bottom">
    This unitholder has advised us that the unitholder is an
    affiliate of a U.S. registered broker-dealer; however, the
    unitholder acquired the common units in the ordinary course of
    business and, at the time of the acquisition, had no agreements
    or understandings, directly or indirectly, with any party to
    distribute the common units held by this unitholder.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (20) </TD>
    <TD></TD>
    <TD valign="bottom">
    This unitholder has advised that Tortoise Capital Advisors,
    L.L.C. serves as the investment advisor to this unitholder and
    that, pursuant to an investment advisory agreement entered into
    with the unitholder, Tortoise Capital Advisors, L.L.C. holds
    voting and dispositive power with respect to the common units
    held by the unitholder. The unitholder has advised us that the
    investment committee of Tortoise Capital Advisors, L.L.C. is
    responsible for the investment management of the
    unitholder&#146;s portfolio, such investment committee being
    comprised of H. Kevin Birzer, Zachary A. Hamel, Kenneth P.
    Malvey, Terry Matlack and David J. Schutle.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (21) </TD>
    <TD></TD>
    <TD valign="bottom">
    This selling unitholder has advised that the natural person with
    voting and dispositive power over the common units beneficially
    owned by the selling unitholder is Jonathon C. King, President
    and Chief Executive Officer of UNC Management Company, Inc., the
    managing member of UNC Investment Fund, LLC.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (22) </TD>
    <TD></TD>
    <TD valign="bottom">
    Kelcy Warren Partners, L.P., is a limited partnership owned by
    Mr.&#160;Warren. Mr.&#160;Warren disclaims beneficial ownership
    of the reported common units except to the extent of his
    pecuniary interest therein.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (23) </TD>
    <TD></TD>
    <TD valign="bottom">
    WH Energy Investors, L.L.C. is an investment vehicle which is
    managed by its members consisting of A.&#160;Keith Weber, Ed
    Hawes and Sterling Holdings, LLC, a Kansas limited liability
    company. Leslie L. Webber and Patricia C. Webber are the sole
    owners of Sterling Holdings, LLC. Each of these persons may be
    deemed to have beneficial ownership of the securities.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (24) </TD>
    <TD></TD>
    <TD valign="bottom">
    The William&#160;P. and Jane&#160;C. Williams Family
    Partnership, Ltd. is a limited partnership owned by
    William&#160;P. Williams who may be deemed to beneficially own
    the limited partner interests held by The William&#160;P. and
    Jane&#160;C. Williams Family Partnership, Ltd. to the extent of
    his interest therein.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (25) </TD>
    <TD></TD>
    <TD valign="bottom">
    This selling unitholder has advised that the natural persons
    with voting and dispositive power over the common units
    beneficially owned by the selling unitholder are Stuart Zimmer
    and Greg Lucas of Zimmer Lucas Capital, LLC.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    80
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any prospectus supplement reflecting a sale of common units
    hereunder will set forth, with respect to the selling
    unitholders:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the name of the selling unitholders;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the nature of the position, office or other material
    relationship which the selling unitholders will have had within
    the prior three years with us or any of our affiliates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the number of common units owned by the selling unitholders
    prior to the offering;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount or number of common units to be offered for the
    selling unitholders&#146; account;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount and (if one percent or more) the percentage of common
    units to be owned by the selling unitholders after the
    completion of the offering.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All expenses incurred with the registration of the common units
    owned by the selling unitholders will be borne by us.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    81
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "PLAN OF DISTRIBUTION" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='131'></A><B><FONT style="font-family: 'Times New Roman', Times">PLAN
    OF DISTRIBUTION</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the date of this prospectus, we have not been advised by
    the selling unitholders as to any plan of distribution.
    Distributions of the common units by the selling unitholders, or
    by its partners, pledgees, donees (including charitable
    organizations), transferees or other successors in interest, may
    from time to time be offered for sale either directly by such
    individual, or through underwriters, dealers or agents or on any
    exchange on which the units may from time to time be traded, in
    the over-the-counter market, or in independently negotiated
    transactions or otherwise. The methods by which the common units
    may be sold include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a block trade (which may involve crosses) in which the broker or
    dealer so engaged will attempt to sell the securities as agent
    but may position and resell a portion of the block as principal
    to facilitate the transaction;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    purchases by a broker or dealer as principal and resale by such
    broker or dealer for its own account pursuant to this prospectus;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    exchange distributions
    <FONT style="white-space: nowrap">and/or</FONT>
    secondary distributions;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    sales in the over-the-counter market;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    underwritten transactions;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    short sales;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    broker-dealers may agree with the selling unitholders to sell a
    specified number of such common units at a stipulated price per
    unit;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    ordinary brokerage transactions and transactions in which the
    broker solicits purchasers;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    privately negotiated transactions;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a combination of any such methods of sale;&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any other method permitted pursuant to applicable law.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Such transactions may be effected by the selling unitholders at
    market prices prevailing at the time of sale or at negotiated
    prices. The selling unitholders may effect such transactions by
    selling the common units to underwriters or to or through
    broker-dealers, and such underwriters or broker-dealers may
    receive compensation in the form of discounts or commissions
    from the selling unitholders and may receive commissions from
    the purchasers of the common units for whom they may act as
    agent. The selling unitholders may agree to indemnify any
    underwriter, broker-dealer or agent that participates in
    transactions involving sales of the units against certain
    liabilities, including liabilities arising under the Securities
    Act. We have agreed to register the shares for sale under the
    Securities Act and to indemnify the selling unitholders and each
    person who participates as an underwriter in the offering of the
    units against certain civil liabilities, including certain
    liabilities under the Securities Act.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with sales of the common units under this
    prospectus, the selling unitholders may enter into hedging
    transactions with broker-dealers, who may in turn engage in
    short sales of the common units in the course of hedging the
    positions they assume. The selling unitholders also may sell
    common units short and deliver them to close out the short
    positions, or loan or pledge the common units to broker-dealers
    that in turn may sell them.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The selling unitholders and any underwriters, broker-dealers or
    agents who participate in the distribution of the common units
    may be deemed to be &#147;underwriters&#148; within the meaning
    of the Securities Act. To the extent any of the selling
    unitholders are broker-dealers, they are, according to SEC
    interpretation, &#147;underwriters&#148; within the meaning of
    the Securities Act. Underwriters are subject to the prospectus
    delivery requirements under the Securities Act. If the selling
    unitholders is deemed to be an underwriter, the selling
    unitholders may be subject to certain statutory liabilities
    under the Securities Act and the Securities Exchange Act of 1934.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There can be no assurances that the selling unitholders will
    sell any or all of the common units offered under this
    prospectus.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    82
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "LEGAL MATTERS" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='132'></A><B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Vinson&#160;&#038; Elkins L.L.P., Houston, Texas, will pass upon
    the validity of the securities offered in this registration
    statement.
</DIV>


<!-- link1 "EXPERTS" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='133'></A><B><FONT style="font-family: 'Times New Roman', Times">EXPERTS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The consolidated financial statements of Energy Transfer Equity,
    L.P. and LE&#160;GP, L.L.C., all incorporated in this prospectus
    by reference from our Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended August&#160;31, 2006 have been audited by
    Grant Thornton LLP, independent registered public accountants,
    as indicated in their reports with respect thereto, and are
    included herein in reliance upon the authority of said firm as
    experts in giving said reports.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The audited historical financial statements of Transwestern
    Pipeline Company, LLC as of December&#160;31, 2005 and for the
    year then ended, included in Exhibit&#160;99.2 of our Current
    Report on
    <FONT style="white-space: nowrap">Form&#160;8-K/A</FONT>
    dated December&#160;1, 2006 have been so incorporated in
    reliance on the report of PricewaterhouseCoopers LLP,
    independent accountants, given on the authority of said firm as
    experts in auditing and accounting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The audited historical financial statements of Titan Energy
    Partners LP and Subsidiary (the &#147;Partnership&#148;) as of
    June&#160;30, 2005 and for the periods from December&#160;20,
    2004 to June&#160;30, 2005 and from July&#160;1, 2004 to
    December&#160;19, 2004 included in Exhibit&#160;99.1 of our
    Current Report on From
    <FONT style="white-space: nowrap">8-K</FONT> dated
    June&#160;6, 2007 have been so incorporated in reliance on the
    reports (which contain an explanatory paragraph relating to the
    Partnership&#146;s emergence from bankruptcy as described in
    Note&#160;1 to the financial statements) of
    PricewaterhouseCoopers LLP, independent accountants, given on
    the authority of said firm as experts in auditing and accounting.
</DIV>


<!-- link1 "WHERE YOU CAN FIND MORE INFORMATION" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='134'></A><B><FONT style="font-family: 'Times New Roman', Times">WHERE
    YOU CAN FIND MORE INFORMATION</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus, including any documents incorporated herein by
    reference, constitutes a part of a registration statement on
    <FONT style="white-space: nowrap">Form&#160;S-3</FONT>
    that we filed with the SEC under the Securities Act. This
    prospectus does not contain all the information set forth in the
    registration statement. You should refer to the registration
    statement and its related exhibits and schedules, and the
    documents incorporated herein by reference, for further
    information about our company and the securities offered in this
    prospectus. Statements contained in this prospectus concerning
    the provisions of any document are not necessarily complete and,
    in each instance, reference is made to the copy of that document
    filed as an exhibit to the registration statement or otherwise
    filed with the SEC, and each such statement is qualified by this
    reference. The registration statement and its exhibits and
    schedules, and the documents incorporated herein by reference,
    are on file at the offices of the SEC and may be inspected
    without charge.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We file annual, quarterly, and current reports, proxy statements
    and other information with the SEC. You can read and copy any
    materials we file with the SEC at the SEC&#146;s Public
    Reference Room at 100&#160;F&#160;Street, N.E.,
    Washington,&#160;D.C. 20549. You can obtain information about
    the operation of the Public Reference Room by calling the SEC at
    <FONT style="white-space: nowrap">1-800-SEC-0330.</FONT>
    The SEC also maintains a website that contains information we
    file electronically with the SEC, which you can access over the
    Internet at
    <FONT style="white-space: nowrap">http://www.sec.gov.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our home page is located at
    <FONT style="white-space: nowrap">http://www.energytransfer.com.</FONT>
    Our annual reports on
    <FONT style="white-space: nowrap">Form&#160;10-K,</FONT>
    our quarterly reports on
    <FONT style="white-space: nowrap">Form&#160;10-Q,</FONT>
    current reports on
    <FONT style="white-space: nowrap">Form&#160;8-K</FONT>
    and other filings with the SEC are available free of charge
    through our web site as soon as reasonably practicable after
    those reports or filings are electronically filed or furnished
    to the SEC. Information on our web site or any other web site is
    not incorporated by reference in this prospectus and does not
    constitute a part of this prospectus.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    83
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->


<!-- link1 "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE" -->


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <A name='135'></A><B><FONT style="font-family: 'Times New Roman', Times">INCORPORATION
    OF CERTAIN DOCUMENTS BY REFERENCE</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are incorporating by reference in this prospectus information
    we file with the SEC, which means that we are disclosing
    important information to you by referring you to those
    documents. The information we incorporate by reference is an
    important part of this prospectus, and later information that we
    file with the SEC automatically will update and supersede this
    information. We incorporate by reference the documents listed
    below and any future filings we make with the SEC, including all
    such documents we may file after the date of the initial
    registration statement and prior to the effectiveness of the
    registration statement, under Sections&#160;13(a), 13(c), 14 or
    15(d) of the Exchange Act, excluding any information in those
    documents that is deemed by the rules of the SEC to be furnished
    not filed, until we close this offering:
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our annual report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended August&#160;31, 2006;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our quarterly reports on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    for the periods ended November&#160;30, 2006, February&#160;28,
    2007 and May&#160;31, 2007;&#160;and
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our current reports on
    <FONT style="white-space: nowrap">Form&#160;8-K</FONT>
    filed September&#160;19, 2006, September&#160;25, 2006,
    October&#160;2, 2006, November&#160;2, 2006, November&#160;30,
    2006, as amended, December&#160;5, 2006, December&#160;21, 2006,
    December&#160;26, 2006, January&#160;8, 2007, January&#160;17,
    2007, February&#160;23, 2007, March&#160;5, 2007, March&#160;29,
    2007, May&#160;8, 2007, June&#160;6, 2007, June&#160;11, 2007,
    June&#160;21, 2007, July&#160;26, 2007, August&#160;17, 2007,
    both on September&#160;26, 2007, both on October&#160;9, 2007
    and October&#160;15, 2007.
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You may request a copy of these filings, which we will provide
    to you at no cost, by writing or telephoning us at the following
    address and telephone number:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Energy Transfer Equity, L.P.
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3738 Oak Lawn Avenue
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dallas, Texas 75219
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Attention: Sonia Aube
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Telephone:
    <FONT style="white-space: nowrap">(214)&#160;981-0700</FONT>
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    84
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PART&#160;II<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Information
    not required in the Prospectus</FONT></B>
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;14.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    Expenses of Issuance and Distribution.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth the estimated expenses in
    connection with the distribution of the securities covered by
    this registration statement of which this prospectus is a part.
    We will bear all of these expenses.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="90%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Registration fee under the Securities Act
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    134,339
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Printing and engraving expenses*
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Legal fees and expenses*
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    30,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Accounting fees and expenses*
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Miscellaneous*
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    194,339
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    *&#160;</TD>
    <TD></TD>
    <TD valign="bottom">
    Estimated solely for the purpose of this Item. Actual expenses
    may be more or less.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;15.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Indemnification
    of Officers and Directors.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Energy
    Transfer Equity, L.P.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As provided in our partnership agreement, which is incorporated
    herein by this reference, we will generally indemnify our
    general partner, officers, directors and affiliates of the
    general partner to the fullest extent permitted by the law
    against all losses, claims, damages or similar events. Subject
    to any terms, conditions or restrictions set forth in our
    partnership agreement,
    <FONT style="white-space: nowrap">Section&#160;17-108</FONT>
    of the Delaware Revised Uniform Limited Partnership Act empowers
    a Delaware limited partnership to indemnify and hold harmless
    any partner or other persons from and against all claims and
    demands whatsoever.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent that the indemnification provisions of our
    partnership agreement purport to include indemnification for
    liabilities arising under the Securities Act of 1933, in the
    opinion of the SEC, such indemnification is contrary to public
    policy and is therefore unenforceable.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;16.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Exhibits</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=01 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=01 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=01 type=align1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="24%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=align1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="53%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="5" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Previously Filed</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>With File<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Exhibit<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Number<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>As<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Number</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>(Form) (Period Ending or Date)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Exhibit</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    1
</TD>
<TD nowrap align="left" valign="top">
    .1**
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Underwriting Agreement.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-32740<BR>
    (8-K)(2/14/2006)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Third Amended and Restated Agreement of Limited Partnership of
    Energy Transfer Equity, L.P.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .2
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-32740<BR>
    (10-K)(11/29/2006)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .3.1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amendment No.&#160;1 to Third Amended and Restated Agreement of
    Limited Partnership of Energy Transfer Equity, L.P.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .3
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    333-128097<BR>
    (S-1/A)(2/03/2006)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .6
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Limited Liability Company Agreement of LE GP, LLC.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .4
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-32740<BR>
    (8-K)(5/07/2007)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .6.1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated Limited Liability Company Agreement of LE
    GP, LLC.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .5
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-32740<BR>
    (8-K)(5/07/2007)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .45
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Unitholder Rights and Restriction Agreement by and among Energy
    Transfer Equity, L.P., Enterprise GP Holdings, L.P., Ray C.
    Davis and Natural Gas Partners VI, L.P.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .6
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-32740<BR>
    (8-K)(2/14/2006)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Specimen Certificate Evidencing Common Units Representing
    Limited Partner Interests in Energy Transfer Equity, L.P.
    (Incorporated by reference to Exhibit&#160;A to the Third
    Amended Restated Agreement of Limited Partnership of Energy
    Transfer Equity, L.P.).
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-1
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=01 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=01 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=01 type=align1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="24%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=align1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="53%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="5" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Previously Filed</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>With File<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Exhibit<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Number<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>As<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Number</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>(Form) (Period Ending or Date)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Exhibit</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (1/19/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Indenture dated January&#160;18, 2005 among Energy Transfer
    Partners, L.P., the subsidiary guarantors named therein and
    Wachovia Bank, National Association, as trustee.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .2
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (1/19/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .2
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    First Supplemental Indenture dated January&#160;18, 2005, among
    Energy Transfer Partners, L.P., the subsidiary guarantors named
    therein and Wachovia Bank, National Association, as trustee.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .3
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (10-Q) (2/28/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .45
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Second Supplemental Indenture dated as of February&#160;24, 2005
    to Indenture dated as of January&#160;18, 2005.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .4
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    1-11727<BR>
    (10-Q) (2/28/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .46
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Notation of Guaranty.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .5
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (1/19/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .3
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Registration Rights Agreement dated January&#160;18, 2005, among
    Energy Transfer Partners, L.P., the subsidiary guarantors named
    therein and the initial purchasers party thereto.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .6
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (10-Q) (2/28/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .39.1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Joinder to Registration Rights Agreement dated February&#160;24,
    2005, among Energy Transfer Partners, L.P., the Subsidiary
    Guarantors and Wachovia Bank, National Association, as trustee.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .7
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (8/2/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Third Supplemental Indenture dated July&#160;29, 2005, to
    Indenture dated January&#160;18, 2005, among Energy Transfer
    Partners, L.P., the subsidiary guarantors named therein, and
    Wachovia Bank, National Association, as trustee.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .8
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (8/2/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .2
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Registration Rights Agreement dated July&#160;29, 2005, among
    Energy Transfer Partners, L.P., the subsidiary guarantors named
    therein, and the initial purchasers party thereto.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .9
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (10-K/A) (8/31/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .9
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Senior Indenture of Energy Transfer Partners, L.P.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .10
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (10-K/A) (8/31/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .10
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Subordinated Indenture of Energy Transfer Partners, L.P.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .11
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (10-K) (8/31/06)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .13
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Fourth Supplemental Indenture dated as of June&#160;29, 2006 to
    Indenture dated January&#160;18, 2005, among Energy Transfer
    Partners, L.P., the subsidiary guarantors named therein and
    Wachovia Bank, National Association, as trustee.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .12
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (10/25/06)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Fifth Supplemental Indenture dated as of October&#160;23, 2006
    to Indenture dated January&#160;18, 2005, among Energy Transfer
    Partners, L.P., the subsidiary guarantors named therein and
    Wachovia Bank, National Association, as trustee.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .13
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (11/30/06)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Registration Rights Agreement, dated November&#160;27, 2006, by
    and among Energy Transfer Equity, L.P. and certain investors
    named therein.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .14
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (3/05/07)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Registration Rights Agreement, dated March&#160;2, 2007, by and
    among Energy Transfer Equity, L.P. and certain investors named
    therein.
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    II-2
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
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    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=01 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=01 type=body -->
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</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="5" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Previously Filed</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>With File<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Exhibit<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Number<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>As<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Number</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>(Form) (Period Ending or Date)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Exhibit</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .15
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (7/23/07)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated Credit Agreement by and among Energy
    Transfer Partners,&#160;L.P. and Wachovia Bank, National
    Association, as administrative agent and Bank of America, N.A.,
    as syndication agent and certain other agents and lenders party
    thereto.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    5
</TD>
<TD nowrap align="left" valign="top">
    .1***
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Opinion of Vinson&#160;&#038; Elkins L.L.P. regarding the
    legality of the common units.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    8
</TD>
<TD nowrap align="left" valign="top">
    .1***
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Opinion of Vinson&#160;&#038; Elkins L.L.P. regarding tax
    matters.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .1***
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Vinson&#160;&#038; Elkins L.L.P. (included in
    Exhibit&#160;5.1).
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .2*
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Grant Thornton LLP.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .3*
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of PricewaterhouseCoopers LLP.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .4*
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of PricewaterhouseCoopers LLP.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    24
</TD>
<TD nowrap align="left" valign="top">
    .1***
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Power of Attorney (set forth on the signature page contained in
    Part&#160;II of this Registration Statement).
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    Filed herewith.</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    ** </TD>
    <TD></TD>
    <TD valign="bottom">
    To be filed by amendment or as an exhibit to a current report on
    Form <FONT style="white-space: nowrap">8-K</FONT> of
    the registrant.</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    *** </TD>
    <TD></TD>
    <TD valign="bottom">
    Previously filed.</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;17.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Undertakings</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;The undersigned registrant hereby undertakes:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;To file, during any period in which offers or sales are
    being made, a post-effective amendment to this registration
    statement:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;To include any prospectus required by
    Section&#160;10(a)(3) of the Securities Act;
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;To reflect in the prospectus any facts or events
    arising after the effective date of this registration statement
    (or the most recent post-effective amendment thereof) which,
    individually or in the aggregate, represent a fundamental change
    in the information set forth in this registration statement.
    Notwithstanding the foregoing, any increase or decrease in
    volume of securities offered (if the total dollar value of
    securities offered would not exceed that which was registered)
    and any deviation from the low or high end of the estimated
    maximum offering range may be reflected in the form of the
    prospectus filed with the SEC pursuant to Rule&#160;424(b) if,
    in the aggregate, the changes in volume and price represent no
    more than a 20% change in the maximum aggregate offering price
    set forth in the &#147;Calculation of Registration Fee&#148;
    table in the effective registration statement;
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;To include any material information with respect to the
    plan of distribution not previously disclosed in this
    registration statement or any material change to the information
    in this registration statement;
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    provided, however, that paragraphs&#160;A(l)(a) and A(l)(b)
    above do not apply if the information required to be included in
    a post-effective amendment by those paragraphs is contained in
    periodic reports filed with or furnished to the Commission by
    the registrant pursuant to Section&#160;13 or 15(d) of the
    Securities Exchange Act of 1934 that are incorporated by
    reference in this registration statement.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;That, for the purpose of determining any liability
    under the Securities Act, each of the post-effective amendments
    shall be deemed to be a new registration statement relating to
    the securities offered therein, and the offering of the
    securities at that time shall be deemed to be the initial bona
    fide offering thereof.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;To remove from registration by means of a
    post-effective amendment any of the securities being registered
    which remain unsold at the termination of the offering.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    II-3
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (4)&#160;That, for the purpose of determining liability under
    the Securities Act to any purchaser:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Each prospectus filed by the registrant pursuant to
    Rule&#160;424(b)(3) shall be deemed to be part of the
    registration statement as of the date the filed prospectus was
    deemed part of and included in the registration
    statement;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Each prospectus required to be filed pursuant to
    Rule&#160;424(b)(2), (b)(5), or (b)(7) as part of a registration
    statement in reliance on Rule&#160;430B relating to an offering
    made pursuant to Rule&#160;415(a)(1)(i), (vii), or (x)&#160;for
    the purpose of providing the information required by
    section&#160;10(a) of the Securities Act shall be deemed to be
    part of and included in the registration statement as of the
    earlier of the date such form of prospectus is first used after
    effectiveness or the date of the first contract of sale of
    securities in the offering described in the prospectus. As
    provided in Rule&#160;430B, for liability purposes of the issuer
    and any person that is at that date an underwriter, such date
    shall be deemed to be a new effective date of the registration
    statement relating to the securities in the registration
    statement to which that prospectus relates, and the offering of
    such securities at that time shall be deemed to be the initial
    bona fide offering thereof. Provided, however, that no statement
    made in a registration statement or prospectus that is part of
    the registration statement or made in a document incorporated or
    deemed incorporated by reference into the registration statement
    or prospectus that is part of the registration statement will,
    as to a purchaser with a time of contract of sale prior to such
    effective date, supersede or modify any statement that was made
    in the registration statement or prospectus that was part of the
    registration statement or made in any such document immediately
    prior to such effective date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (5)&#160;That, for the purpose of determining liability of the
    registrant under the Securities Act to any purchaser in the
    initial distribution of the securities, the undersigned
    registrant undertakes that in a primary offering of securities
    of the undersigned registrant pursuant to this registration
    statement, regardless of the underwriting method used to sell
    the securities to the purchaser, if the securities are offered
    or sold to such purchaser by means of any of the following
    communications, the undersigned registrant will be a seller to
    the purchaser and will be considered to offer or sell such
    securities to such purchaser:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Any preliminary prospectus or prospectus of the
    undersigned registrant relating to the offering required to be
    filed pursuant to Rule&#160;424;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Any free writing prospectus relating to the offering
    prepared by or on behalf of the undersigned registrant or used
    or referred to by the undersigned registrant;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;The portion of any other free writing prospectus
    relating to the offering containing material information about
    the undersigned registrant or its securities provided by or on
    behalf of the undersigned registrant;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;Any other communication that is an offer in the
    offering made by the undersigned registrant to the purchaser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;The undersigned registrant hereby undertakes that, for
    purposes of determining any liability under the Securities Act,
    each filing of its annual report pursuant to Section&#160;13(a)
    or Section&#160;15(d) of the Exchange Act (and, where
    applicable, each filing of an employee benefit plan&#146;s
    annual report pursuant to Section&#160;15(d) of the Exchange
    Act) that is incorporated by reference in this registration
    statement shall be deemed to be a new registration statement
    relating to the securities offered herein, and the offering of
    the securities at that time shall be deemed to be the initial
    bona fide offering thereof.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C.&#160;Insofar as indemnification for liabilities arising under
    the Securities Act may be permitted to directors, officers, and
    controlling persons of the registrant pursuant to the provisions
    described in Item&#160;15 above, or otherwise, the registrant
    has been advised that in the opinion of the SEC that
    indemnification is against public policy as expressed in the
    Securities Act and is, therefore, unenforceable. In the event
    that a claim for indemnification against any liability (other
    than the payment by the registrant of expenses incurred or paid
    by a director, officer, or controlling person of the registrant
    in the successful defense of any action, suit or
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-4
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    proceeding) is asserted by a director, officer, or controlling
    person in connection with the securities being registered, the
    registrant will, unless in the opinion of its counsel the matter
    has been settled by controlling precedent, submit to a court of
    appropriate jurisdiction the question whether indemnification by
    it is against public policy as expressed in the Securities Act
    and will be governed by the final adjudication of the issue.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    D.&#160;The undersigned registrant hereby undertakes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;For purposes of determining any liability under the
    Securities Act, the information omitted from the form of
    prospectus or any prospectus supplement filed as part of this
    registration statement in reliance on Rule&#160;430A and
    contained in a form of prospectus or prospectus supplement filed
    by the registrant pursuant to Rule&#160;424(b)( 1)&#160;or
    (4)&#160;or 497(h) under the Securities Act shall be deemed to
    be part of this registration statement as of the time it was
    declared effective.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;For the purpose of determining any liability under the
    Securities Act, each post-effective amendment that contains a
    form of prospectus or prospectus supplement shall be deemed to
    be a new registration statement relating to the securities
    offered therein, and the offering of such securities at that
    time shall be deemed to be the initial bona fide offering
    thereof.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-5
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SIGNATURES</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the requirements of the Securities Act of 1933, the
    registrant certifies that it has reasonable grounds to believe
    that it meets all of the requirements for filing on
    <FONT style="white-space: nowrap">Form&#160;S-3</FONT>
    and has duly caused this Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-3</FONT>
    to be signed on its behalf by the undersigned, thereunto duly
    authorized, in the City of Dallas, State of Texas, on the
    19th&#160;day of October, 2007.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>ENERGY TRANSFER EQUITY, L.P.</B>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="49%"></TD>
    <TD width="4%"></TD>
    <TD width="47%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    By:&#160;
</TD>
    <TD align="left">
    LE GP, L.L.C.
</TD>
</TR>

</TABLE>

<DIV align="left" style="margin-left: 53%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    its general partner
</DIV>

<DIV style="margin-top: 48pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="49%"></TD>
    <TD width="4%"></TD>
    <TD width="47%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    By:&#160;
</TD>
    <TD align="left">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;John
    W. McReynolds</DIV>
</TD>
</TR>

</TABLE>

<DIV style="font-size: 2pt; margin-left: 53%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=0 -->

<DIV align="left" style="margin-left: 53%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    John W. McReynolds
</DIV>

<DIV align="left" style="margin-left: 53%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    President and Chief Financial Officer
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Pursuant to the requirements of the Securities Act of 1933,
    this registration statement has been signed by the following
    persons in the capacities and on the dates indicated:</B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="3%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="37%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="38%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="15%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Signature</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Title</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Date</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 12pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%">/s/&#160;&#160;John
    W. McReynolds</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=184 length=0 -->John
    W. McReynolds
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    President and Chief Financial Officer (Principal Executive,
    Financial and Accounting Officer)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    October&#160;19, 2007
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%">*</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=184 length=0 -->Ray
    C. Davis
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    October&#160;19, 2007
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%">*</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=184 length=0 -->Kelcy
    L. Warren
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Director and Chairman of the Board
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    October&#160;19, 2007
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%">*</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=184 length=0 -->David
    R. Albin
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    October&#160;19, 2007
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%">*</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=184 length=0 -->Bill
    W. Byrne
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    October&#160;19, 2007
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%">*</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=184 length=0 -->Paul
    E. Glaske
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    October&#160;19, 2007
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%">*</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=184 length=0 -->John
    D. Harkey
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    October&#160;19, 2007
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%">*</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=184 length=0 -->Kenneth
    A. Hersh
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    October&#160;19, 2007
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%">*</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=184 length=0 -->K.
    Rick Turner
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    October&#160;19, 2007
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-6
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">EXHIBIT&#160;INDEX</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=01 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=01 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=01 type=align1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="24%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=align1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="53%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="5" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Previously Filed</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>With File<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Exhibit<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Number<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>As<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Number</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Form) (Period Ending or Date)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Exhibit</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    1
</TD>
<TD nowrap align="left" valign="top">
    .1**
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Underwriting Agreement.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-32740<BR>
    (8-K)(2/14/2006)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Third Amended Restated Agreement of Limited Partnership of
    Energy Transfer Equity, L.P.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .2
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-32740<BR>
    (10-K)(11/29/2006)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .3.1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amendment No.&#160;1 to Third Amended and Restated Agreement of
    Limited Partnership of Energy Transfer Equity, L.P.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .3
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    333-128097<BR>
    (S-1/A)(2/03/2006)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .6
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Limited Liability Company Agreement of LE GP, LLC.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .4
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-32740<BR>
    (8-K)(5/07/2007)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .6.1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated Limited Liability Company Agreement of LE
    GP, LLC.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .5
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-32740<BR>
    (8-K)(5/07/2007)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .45
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Unitholder Rights and Restriction Agreement by and among Energy
    Transfer Equity, L.P., Enterprise GP Holdings, L.P., Ray C.
    Davis and Natural Gas Partners VI, L.P.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .6
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-32740<BR>
    (8-K)(2/14/2006)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Specimen Certificate Evidencing Common Units Representing
    Limited Partner Interests in Energy Transfer Equity, L.P.
    (Incorporated by reference to Exhibit&#160;A to the Third
    Amended Restated Agreement of Limited Partnership of Energy
    Transfer Equity, L.P.).
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (1/19/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Indenture dated January&#160;18, 2005 among Energy Transfer
    Partners, L.P., the subsidiary guarantors named therein and
    Wachovia Bank, National Association, as trustee.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .2
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (1/19/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .2
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    First Supplemental Indenture dated January&#160;18, 2005, among
    Energy Transfer Partners, L.P., the subsidiary guarantors named
    therein and Wachovia Bank, National Association, as trustee.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .3
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (10-Q) (2/28/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .45
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Second Supplemental Indenture dated as of February&#160;24, 2005
    to Indenture dated as of January&#160;18, 2005.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .4
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (10-Q) (2/28/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .46
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Notation of Guaranty.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .5
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (1/19/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .3
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Registration Rights Agreement dated January&#160;18, 2005, among
    Energy Transfer Partners, L.P., the subsidiary guarantors named
    therein and the initial purchasers party thereto.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .6
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (10-Q) (2/28/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .39.1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Joinder to Registration Rights Agreement dated February&#160;24,
    2005, among Energy Transfer Partners, L.P., the Subsidiary
    Guarantors and Wachovia Bank, National Association, as trustee.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .7
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (8/2/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Third Supplemental Indenture dated July&#160;29, 2005, to
    Indenture dated January&#160;18, 2005, among Energy Transfer
    Partners, L.P., the subsidiary guarantors named therein, and
    Wachovia Bank, National Association, as trustee.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .8
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (8/2/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .2
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Registration Rights Agreement dated July&#160;29, 2005, among
    Energy Transfer Partners, L.P., the subsidiary guarantors named
    therein, and the initial purchasers party thereto.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .9
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (10-K/A) (8/31/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .9
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Senior Indenture of Energy Transfer Partners, L.P.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .10
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (10-K/A) (8/31/05)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .10
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Subordinated Indenture of Energy Transfer Partners, L.P.
</TD>
</TR>
</TABLE>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=01 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=01 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=01 type=align1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="24%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=align1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="53%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="5" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Previously Filed</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>With File<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Exhibit<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Number<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>As<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Number</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Form) (Period Ending or Date)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Exhibit</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .11
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (10-K) (8/31/06)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .13
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Fourth Supplemental Indenture dated as of June&#160;29, 2006 to
    Indenture dated January&#160;18, 2005, among Energy Transfer
    Partners, L.P., the subsidiary guarantors named therein and
    Wachovia Bank, National Association, as trustee.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .12
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (10/25/06)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Fifth Supplemental Indenture dated as of October&#160;23, 2006
    to Indenture dated January&#160;18, 2005, among Energy Transfer
    Partners, L.P., the subsidiary guarantors named therein and
    Wachovia Bank, National Association, as trustee.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .13
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (11/30/06)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Registration Rights Agreement, dated November&#160;27, 2006, by
    and among Energy Transfer Equity, L.P. and certain investors
    named therein.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .14
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (3/05/07)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Registration Rights Agreement, dated March&#160;2, 2007, by and
    among Energy Transfer Equity, L.P. and certain investors named
    therein.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .15
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    1-11727<BR>
    (8-K) (7/23/07)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated Credit Agreement by and among Energy
    Transfer Partners,&#160;L.P. and Wachovia Bank, National
    Association, as administrative agent and Bank of America, N.A.,
    as syndication agent and certain other agents and lenders party
    thereto.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    5
</TD>
<TD nowrap align="left" valign="top">
    .1***
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Opinion of Vinson&#160;&#038; Elkins L.L.P. regarding the
    legality of the common units.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    8
</TD>
<TD nowrap align="left" valign="top">
    .1***
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Opinion of Vinson&#160;&#038; Elkins L.L.P. regarding tax
    matters.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .1***
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Vinson&#160;&#038; Elkins L.L.P. (included in
    Exhibit&#160;5.1).
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .2*
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Grant Thornton LLP.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .3*
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of PricewaterhouseCoopers LLP.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .4*
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of PricewaterhouseCoopers LLP.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    24
</TD>
<TD nowrap align="left" valign="top">
    .1***
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Power of Attorney (set forth on the signature page contained in
    Part&#160;II of this Registration Statement).
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    Filed herewith</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    ** </TD>
    <TD></TD>
    <TD valign="bottom">
    To be filed by amendment or as an exhibit to a current report on
    Form <FONT style="white-space: nowrap">8-K</FONT> of
    the registrant.</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    *** </TD>
    <TD></TD>
    <TD valign="bottom">
    Previously filed.</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>2
<FILENAME>h48218a1exv23w2.htm
<DESCRIPTION>CONSENT OF GRANT THORNTON LLP.
<TEXT>
<HTML>
<HEAD>
<TITLE>exv23w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;23.2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have issued our report dated November&nbsp;20, 2006 (except for the information in Note 18, as to
which the date is November&nbsp;28, 2006) accompanying the consolidated financial statements of Energy
Transfer Equity, L.P. and subsidiaries (the &#147;Partnership&#148;) and our report dated November&nbsp;20, 2006
(except for the information in Note 12, as to which the date is November&nbsp;28, 2006) accompanying the
consolidated balance sheet of LE GP, LLC and subsidiaries appearing in the Partnership&#146;s 2006
Annual Report on Form 10-K for the year ended August&nbsp;31, 2006 which are incorporated by reference
in this Pre-Effective Amendment No.&nbsp;1 to this Registration Statement. We consent to the incorporation by reference in
the Pre-Effective Amendment No.&nbsp;1 to this Registration
Statement of the aforementioned reports and to the use of our name as it appears under the caption
&#147;Experts&#148;.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">/s/ GRANT THORNTON LLP
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Tulsa, Oklahoma<BR>
October&nbsp;19, 2007

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.3
<SEQUENCE>3
<FILENAME>h48218a1exv23w3.htm
<DESCRIPTION>CONSENT OF PRICEWATERHOUSECOOPERS LLP.
<TEXT>
<HTML>
<HEAD>
<TITLE>exv23w3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT 23.3</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>CONSENT OF INDEPENDENT ACCOUNTANTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We hereby consent to the incorporation by reference in this Pre-Effective Amendment No.&nbsp;1
to Registration Statement on Form S-3
of Energy Transfer Equity, L.P. of our report dated March&nbsp;30, 2006, relating to the financial
statements of Transwestern Pipeline Company, LLC, which appears in the Current Report on Form 8-K/A
(Amendment No.&nbsp;1) of Energy Transfer Equity, L.P. dated December&nbsp;1, 2006. We also
consent to the reference to us under the heading &#147;Experts&#148;
in this Pre-Effective Amendment No.&nbsp;1 to Registration Statement
on Form S-3.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">/s/ PricewaterhouseCoopers LLP
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Houston, Texas<BR>
October&nbsp;19, 2007
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.4
<SEQUENCE>4
<FILENAME>h48218a1exv23w4.htm
<DESCRIPTION>CONSENT OF PRICEWATERHOUSECOOPERS LLP.
<TEXT>
<HTML>
<HEAD>
<TITLE>exv23w4</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT 23.4</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>CONSENT OF INDEPENDENT ACCOUNTANTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We hereby consent to the incorporation by reference in
this Pre-Effective Amendment No.&nbsp;1 to Registration Statement on Form S-3
of Energy Transfer Equity, L.P. of our reports dated January&nbsp;23, 2006, relating to the financial
statements of Titan Energy Partners, L.P. and subsidiary (the &#147;Partnership&#148;) which appear in the
Current Report on Form 8-K of Energy Transfer Partners, L.P. dated June&nbsp;6,
2007. We also
consent to the reference to us under the heading &#147;Experts&#148;
in this Pre-Effective Amendment No.&nbsp;1 to Registration Statement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">/s/ PricewaterhouseCoopers LLP
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Chicago, Illinois<BR>
October&nbsp;19, 2007
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
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